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GBP/NZD Long Opportunity at 2.1622

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Last updated 9/1/2010 9:01 PM EST (GMT -5) 12 Comments

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Bradley W. Gareiss

Technical Analyst, GFT

A bullish butterfly pattern is currently forming on the GBP/NZD 2hr Chart below.  The pattern has excellent price symmetry, and the time symmetry is looking like it could be perfect.  The trade would enter near a possible bullish trend line on the Daily Chart.  Overall, this is a really solid setup.  The trade would be invalidated if it rose to 2.1830 before entering.

We are looking to buy the GBP/NZD if it drops to 2.1622 (Point D).  Point D is located at the convergence of the following points:

To recap, we will look to buy the GBP/NZD at 2.1622 with our stop placed at 2.1525.  Our initial profit target is 2.1781 (38.2% of CD).

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  • Daily Chart - Trade would enter within a bullish uptrend.
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  • 2hr Chart - Bullish butterfly; buy at 2.1622.

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 (12)

NeoFX

September 01, 2010 at 10:06 PM ET

yet another chance to short the AUD/USD pair perhaps?

It just came shy of the 78.6% bounce but looks like it's plummeting.

If so, then .8650 should definitely be the target this time. Either way I'm in until .8960 (for now)

I'm Exited!

Golpster

September 01, 2010 at 10:54 PM ET

I'll ride that slide

FXDragon

September 02, 2010 at 07:03 AM ET

Would you put a stop? 92 mybe?

FXDragon

September 02, 2010 at 03:59 AM ET

Check out Mr.Gareiss's eurusd medium term swing forcast!!! I think it's very probable and it would be trade of this quarter(which compliments my crash theory). Im also short from the 38.29 fib all the way down to 78.69% at least.
Bradley,
If you lived in a world where you did not have to worry about stops(if you did), would you also short from the 38.29?

Regards,

FXDragon

September 02, 2010 at 06:56 AM ET

Also, why do you invalidate within 24 hours? Do broken trendlines tend to move fast?

Thanks,

bgareiss

September 02, 2010 at 12:40 PM ET

The entry would be higher now because the trend line keeps rising, so the point where we would see moves as time goes on.

Brad

FXDragon

September 03, 2010 at 01:53 AM ET

Based on the first 2 weeks of weekly claims, im expecting a bad nfp #. That would possibly react as an A shaped reaction on the pair, which would take us to the entry target hopefully. I love this scenario, we’ll see...

By the way, your update to 1.2964 not showing on the trade rec. window. Im in at 1.2935 anyway.

NeoFX

September 02, 2010 at 08:57 AM ET

na,

on the AUD/USD I wouldn't take any chances. My stop now is @ .9140

but I am in the GBP/CAD buy recommended by Roger, so far so good. we'll see on that one

Neo

NeoFX

September 02, 2010 at 09:16 AM ET

and I'd also get out @ .8960 area.

I' afraid this 38.2% ret (@ 81.00 earlier in August) is too strong a spport to be broken for now and may actually be the new C with further upside target @ .9400 or even .9600

it's exactly what it did on 3.26.2010 on daily.

either way to be 100% bearish again, it'd have to break my original .8650 to satisfy me. For now I'll exit @ .8960 if it drops down to it then I'll sit and watch.

but that GBP/CAD trade was a beauty....I just got in this morning even lower than actually posted. And it shot up from there within minutes.

I'm exited. Off to work now. :)
Neo

FXDragon

September 03, 2010 at 01:30 AM ET

How can you say 81 is strong support, its not even tested yet. So you think while eurusd goes to parity very soon, 81 cant be broken. That would be amazing! Anyway im predicting the dialogue we’ll have after new year:

Neo: Gee, that 0.77 seems too strong to break. It could go to 93.
Dragon: Dude, thats what you said last time. Im targeting 72.

Lets see how it plays out...

NeoFX

September 02, 2010 at 12:47 PM ET

Brad,

wouldn't 1.2881be a better sell entry on the EUR/USD?

I see that you're using the 50% as your resistance point @ 1.2967 but doesn't this last up ABCD complete @ 1.2900 at its D 161.8% ext which also coincides with the down 38.2% resistance level?

trying to see the reasoning behind your entry point. 1.2881 seems like a more logical one for now.

Neo

bgareiss

September 02, 2010 at 12:49 PM ET

The idea is to sell if the EUR/USD reaches the broken trend line.

Brad

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