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GBP/JPY to Resume Downtrend at 132.54?

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Last updated 9/3/2010 6:32 PM EST (GMT -5) 0 Comments - Add your comment

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Bradley W. Gareiss

Technical Analyst, GFT

A bearish three drives pattern is currently forming on the GBP/JPY 1hr Chart.  There is also a point X that works, so this is a hybrid between a bearish Gartley and a three drives pattern.  Regardless, the price symmetry is really solid.  The trade would also enter near the bearish trend line on the 8hr Chart.  While the set up is a good one, the catch is that the pair is near point C and has to rise a long way before entering.  Therefore, the trade could be quickly invalidated with a small drop, but it is still worth posting.  Also beware of long bars at the end of the C3 leg, as they could suggest strong upward momentum.  The trade is invalidated if the pair drops to 129.95 before reaching the entry.

We are looking to sell the GBP/JPY if it rises to 132.54 (Point D).  Point D is located at the convergence of the following points:

To recap, we will look to sell the GBP/JPY at 132.54 with our stop placed at 133.25.  Our initial profit target is 131.24 (38.2% of A3).

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  • 8hr Chart - Trade would enter near the bearish trend line.
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  • 1hr Chart - Bearish three drives pattern; sell at 132.54.

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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