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CHF/JPY to Resume Downtrend at 83.79?

Last updated 2/3/2012 7:22 PM EST (GMT -5) 0 Comments - Add your comment

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Bradley W. Gareiss

Technical Analyst, GFT

A bearish Gartley pattern is emerging on the CHF/JPY 2hr Chart below. The pattern has good price symmetry, and the time symmetry is acceptable at this point. For proper time symmetry, we would like the CD to continue rallying with the same approximate slope as AB.  The trade idea would enter within the context of a strong downtrend seen on the Daily Chart.  While the trade idea wouldn't enter at a specific bearish trend line, point X began at 38.2% of YZ.  A longer term 38.2% retracement suggests the pair could continue with a sharp drop.  Our pattern could help us get in on that move down.  The trade is invalid if the pair falls to 82.60 before entering.

The patterns suggests selling the CHF/JPY if it rises to 83.79 (Point D).  Point D is located at the convergence of the following points:

To recap, the pattern suggests selling the CHF/JPY at 83.79 with our stop placed at 84.02.  Our initial profit target is 83.44 (38.2% of CD).

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  • Daily Chart - General downtrend.
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  • 2hr Chart - Bearish Gartley; sell at 83.79.

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