GBP/JPY Short Opportunity at 139.27

Last updated 3/11/2010 7:01 PM EST (GMT -5) 4 Comments

Forex Trading involves high risks, with the potential for substantial losses and is not suitable for all persons. Past performance is not necessarily indicative of future results.

Bradley W. Gareiss

Technical Analyst, GFT

A bearish Gartley pattern is forming on the GBP/JPY 4hr Chart.  This pattern has nearly perfect price symmetry.  The trade would enter just above the 38.2% Fibonacci retracement on the Daily Chart as well.  Additionally, the trade would enter near the bearish trend line on the Daily Chart.  This is a a textbook trade that will be an ideal setup if the CD leg rises with roughly the same slope that AB has.

We are looking the sell the GBP/JPY if it rises to 139.27 (Point D).  Point D is located at the convergence of the following points:

We will now go over what to watch for assuming the pair continues rising towards our entry at 139.27.  First, we need to watch how quickly CD completes.  We are looking for the CD leg to rise slowly and enter the trade near where we have drawn the hypothetical entry.  If there are long bars near the completion of the CD leg, we will not take the trade.  Also, if the pair comes within 30 pips of reaching our entry, does not enter, and reaches 137.05 before entering, the trade is invalid.  The trade is also invalid if the pair falls below 133.65 before hitting our entry.

To recap, we will look to sell the GBP/JPY at 139.27 with our stop placed at 140.39.  Our initial profit target is 137.58 (38.2% of CD).

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  • Daily Chart - Trade would enter near bearish trend line and 38.2% Fibonacci retracement.
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  • 4hr Chart - Bearish Gartley; sell at 139.27.

Comments (4)

silver

March 12, 2010 at 01:55 PM ET

Is this trade a competition match with Rogers short of same pair? lol!!! To see whose pattern is going to be correct?

bgareiss

March 12, 2010 at 01:57 PM ET

It is the same pattern with slightly different entries and exits. It is my fault because I posted this without noticing Roger had previously used the same pattern. At least this is a good example of how different entries and exits will be used even by people using a very similar methodology.

Brad

silver

March 12, 2010 at 03:17 PM ET

I appreciate you professionals at FX360 I follow and read alot of different sites and you are the most accurate of them all in my opiion. Thanks TONS!!!!!

bgareiss

March 15, 2010 at 11:48 AM ET

I am glad you enjoy the site.

Brad

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