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EUR/JPY to Resume Downtrend at 101.06?

Last updated 2/5/2012 4:54 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 EUR/JPY 2hr Chart below. The pattern has solid price symmetry, and it time symmetry will also be ideal if the trade idea enters within 24 hours after the open.  The trade idea would also enter near the bearish trend line on the Daily Chart.  Please note that this setup is positively correlated with the  "CHF/JPY Short Idea" href="http://www.fx360.com/commentary/brad/6986/chfjpy-to-resume-downtrend-at-83-79.aspx?num=1328478597006"> CHF/JPY Short Idea .  Due to the correlated setup, make sure to take this into account when determining risk management.  The trade is invalid if the pair falls to 99.85 before entering. 

The pattern suggests selling the EUR/JPY if it rises to 101.06 (Point D).  Point D is located at the convergence of the following points:

To recap, the pattern suggests selling the EUR/JPY at 101.06 with our stop placed at 101.30.  Our initial profit target is 100.60 (38.2% of CD).

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  • Daily Chart - Trade idea would enter near the long term bearish trend line.
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  • 2hr Chart - Bearish Gartley; sell at 101.06.

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