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EUR/JPY Opportunity to Buy at 130.11

The information, including Commentary and Trade Ideas, provided on FX360.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. Global Forex Trading and FX360 .com is merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite. Any projections or views of the market provided by FX360.com may not prove to be accurate.

Last updated 1/15/2010 7:38 PM EST (GMT -5) 15 Comments

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Bradley W. Gareiss

Technical Analyst, GFT

There is a bullish Gartley pattern forming on the EUR/JPY 4hr Chart.  We have extended CD to 127.2% of AB because there were relatively long bars in the CD leg.  The trade has almost completed.  The pattern has excellent price symmetry and is very close to completing with good time symmetry.  We have also drawn a short term bearish channel on the 30min Chart.  The idea is that if the pair reacts off the Gartley and breaks up out of the channel, then we could see a quick rise.

We are looking to buy the EUR/JPY if the pair falls to 130.11 (Point D).  Point D is located at the convergence of the following levels:

We will now go over what to watch for assuming the EUR/JPY continues falling toward our entry at 130.11.  The trade is invalid if the pair rises above 131.35 before hitting our entry. Otherwise, the trade is so close to entering that there are no other invalidation criteria.

To recap, we will look to buy the EUR/JPY at 130.11 with our stop placed at 129.29.  Our initial profit targets are 131.35 (38.2% of CD) and 132.22 (61.8% of CD).

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  • 4hr Chart - Bullish Gartley; buy at 130.11.
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  • 30min Chart - Breakout from short term bearish channel could lead to a quick rise up.

The information, including Commentary and Trade Ideas, provided on FX360.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. Global Forex Trading and FX360 .com is merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite. Any projections or views of the market provided by FX360.com may not prove to be accurate.

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Comments (15)

FXDragon

January 16, 2010 at 08:51 AM ET

Im shorting the smack out of yen crosses lately with good profit so i'll comment.
Im also short at the moment and will go long after an expected drop. Theres a high probability of getting very close to this stop mybe even stopping. Just that the profit margin will narrow if it plays out that way.
I'll get in below this buy level and move my stop a little below that.

hsbc

January 16, 2010 at 09:47 AM ET

u amaze me. in another forum u look for eur rally and here u say that u are short eurjpy. are there two of u?

FXDragon

January 16, 2010 at 11:30 AM ET

How about this? A yen rally first and then eur rally sometime. I open and close various trades. The week is too long for a single trade you know. "Im also short at the moment and will go long after an expected drop," it reads. I'm trying to predict the future gimme a little break here. Getting close. I'm a little amazing, my girlfriend says:)
Are you still long on your precious gbp? I am.

FXDragon

January 16, 2010 at 11:36 AM ET

A yen cross is a sweet way to hedge against short coverings of a currency these days. Try it.

hsbc

January 16, 2010 at 07:50 PM ET

dragon - so u trade short term now? i thot u had no stop loss. if u had said u were short a audjpy i would not have anything to say but u are short eurjpy and long eur ... so what does that leave u? obviously just short usdjpy. there's nothing fantastic abt that trade. i am not sure abt u but i think u should either have a strategy which is longer term than 30min or just keep ur view to urself rather than than publish views that mislead inexperienced traders. and posting trades after they happen just doesnt win u any praise.

hsbc

January 16, 2010 at 07:53 PM ET

dragon- i tried ur style of trading short term without sl. it works sometimes but often ur losses will wipe out ur gains. u need to choose either to trade medium term and accpet huge swings or short term with stops.

FXDragon

January 17, 2010 at 06:59 AM ET

I'm basically buying lows and selling highs on highbeta vs. yen pairs, favoring upside. It's been profiting since May quite nicely. When i say i dont use sl, that doesnt mean i dont stop a trade manually if it goes bad. My no-sl model also has been working super since March for risk fx, it just gone bad after last good nfp for eur, which i had to stop.
Sorry for any misunderstandings:(

Silenus

January 18, 2010 at 06:24 AM ET

You guys are way wrong on this one. Bearish engulfing candle on the weekly. Need I say more?

bgareiss

January 18, 2010 at 07:50 PM ET

As I often write on FX360, everyone has an opinion. If everyone had the same opinion, the markets would no longer function. I am not sure if this trade will win or not, but so far it has seen support at the exact area we entered the trade at. Brad

Doobp

January 18, 2010 at 01:34 PM ET

-.- it can also go to T2,132.22 before retracting down all the way. are you a live or demo trader?

Roger, I was wondering y u didnt close ur trade prior to aussie news release last week.

wwwin

January 18, 2010 at 03:03 PM ET

I would not take this trade, as it is suicidal, the euro is weakening and the jpy is strengthening. Fortget about this pattern on this one. Just my for of caution. The way to make money is to do the opposite of the trades posted, had you done that the last 30 days, you would be up +470 pips.

margaret

January 18, 2010 at 09:16 PM ET

Brad how did you buy at 130.11 as your latest alert states. I have had a buy order in since friday and havent seen the eur/jap drop below 130.175. If it has then the fx trading company i use (OANDA) has its own unique board because my order has not been filled yet!!!!

bgareiss

January 18, 2010 at 09:20 PM ET

I can't speak for Oanda, but the EUR/JPY went down to 130.07 with GFT. Therefore the trade has entered. Brad

Doobp

January 19, 2010 at 12:50 AM ET

I dont mean to criticize or anything, but what if one day you realised that gartley and butterfly tech analyze do not work well anymore? At which juncture you will abandon it? I believe many traders had asked this question before

bgareiss

January 19, 2010 at 11:20 AM ET

Doobp, that is a valid question for any methodology. One of the reasons we use this particular methodology is that it has been around for decades. Additionally, it works in all markets on all time frames. Those facts don't guarantee this type of thing will work forever, but they increase the odds of sustainability compared to systems that don't fit those criteria. Of course, any system is going to have periods where there is a drawdown. The longer you trade, the more drawdowns you will see, and the less concerned you will become by them. A good example is when the stock market inevitably has a crisis. Although every stock market crash is fairly similar, there are always plenty of people proclaiming that the markets are over and dead. And then the market eventually rises to new highs, and most people forget about the panic until the next crash. Brad

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