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EUR/JPY to Resume Downtrend at 106.66?

Last updated 9/16/2011 5:42 PM EST (GMT -5) 2 Comments

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Bradley W. Gareiss

Technical Analyst, GFT

A bearish Gartley pattern is emerging on the EUR/JPY 15min Chart below. The pattern has decent price symmetry, although it is much too early to determine the time symmetry because the pair is so close to point C. For proper time symmetry, we would like the CD leg to rise with the same general slope as the AB leg.  The trade idea may not enter directly at the bearish trend line on the 4hr Chart, but the downtrend is still better than nothing.  Also, if the CD leg rises a little slowly, there is still a chance the trade idea could enter at the trend line.  The trade is invalid if the pair falls to 105.76 before entering. 

We are looking to sell the EUR/JPY if it rises to 106.66 (Point D).  Point D is located at the convergence of the following points:

To recap, we are looking to sell the EUR/JPY at 106.66 with our stop placed at 106.87.  Our initial profit target is 106.24 (61.8% of CD).

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  • 4hr Chart - Trade would enter just before the bearish trend line.
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  • 15min Chart - Bearish Gartley; sell at 106.66.

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Comments (2)

Gogolando

September 18, 2011 at 02:06 AM ET

Hey Brad,

Isn't the B point supposed to be 61.8 of XA for it to be a valid Gartley? I looks like the B is right smack in between the 50 and the 61.8. Did you pick the 61,8 for some reaso? Wouldn't using the 50 make it a Bat pattern ending at 88.6 of XA? I set my PRZ at the Bat level.

bgareiss

September 19, 2011 at 03:08 PM ET

The EUR/JPY gapped down on the open, so the trade is no longer valid. However, point C was very close to 61.8% of AB. It wasn't exact, but it was definitely close enough so that the pattern had proper price symmetry.

Brad

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