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Will GBP/AUD Resume Downtrend at 1.6759?

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 3/17/2010 7:01 PM EST (GMT -5) 2 Comments

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Bradley W. Gareiss

Technical Analyst, GFT

A bearish Gartley/double tops forming on the GBP/AUD 2hr Chart.  This pattern has perfect time symmetry among the primary three levels (100% of XA, 161.8% of BC, and ABCD).  There is also a secondary ABCD pattern within the primary CD leg that completes at almost exactly the sell entry.  This type of convergence is not common.  The pair has also been in a downtrend no matter what time frame you watch, save the recent rise from A to D.  This is definitely an environment we would want to be selling in.

We are looking the sell the GBP/AUD if it rises to 1.6759 (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 1.6759.  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 25 pips of reaching our entry, does not enter, and reaches 1.6610 before entering, the trade is invalid.  The trade is also invalid if the pair falls below 1.6490 before hitting our entry.

To recap, we will look to sell the GBP/AUD at 1.6759 with our stop placed at 1.6837.  Our initial profit target is 1.6641 (38.2% of CD).

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  • Weekly Chart - Long term overall downtrend.
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  • 2hr Chart - Bearish Gartley; sell at 1.6759.

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.

The views of the authors and analysts are not necessarily those of Global Forex Trading, its owners, officers, agents or other employees. FX360.com and the currency research team will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained on FX360.com. Global Forex Trading and the currency research team do not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.

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Comments (2)

kingnai

March 17, 2010 at 09:45 PM ET

Do you think that posting this and all the people that see it and use it actually make it move in a way other than what is predicted?

If 100k people all put in a sell at the same point wouldn't that make that point invalid?

MoneyManager

March 17, 2010 at 10:49 PM ET

This is a worry that many a novice trader expresses. First of all, the size of the market is almost unfathomable. To say it is huge is to make a gross understatement. There is simply no way that this board is going to influence any significant fraction of the market -- particularly when the trades are not foolproof (as no trade recommendations could ever be).

Moreover, it's been shown many times that even if you gave people a winning system, because it would *not* win every trade (or maybe not even the majority of trades), people would start tinkering with it. Before long, they'd be making moves that were not at all part of the system they were given. Same thing here. People are going to choose to enter early, late, take profits or losses when their gut tells them to instead of following the recs to the letter, all kinds of things. There are even people who think it's a good idea to *fade* these plays (go the other way). In a nutshell, you just don't have to worry about enough people playing the same trade recommendations and affecting your outcome. It's just not going to happen. The market is staggeringly deep, and much of it doesn't even understand English, so they wouldn't even be privy to these trades. People all around the world are buying and selling for reasons that have just about zero to do with these trade recommendations. There are a number of healthy fears to have about the market. This ain't one of them. ^_^

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