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EUR/GBP to Face Strong Resistance at 0.8117?

Last updated 7/3/2012 8:15 PM EST (GMT -5) 2 Comments

A bearish pattern is currently forming on the EUR/GBP 2hr Chart. There are several reasons that we are looking for resistance at 0.8117. The entry is located near the convergence of the following levels: 78.6% of 01, 127.2% of AB, and 1A=BC. Therefore, our entry would fulfill the criteria needed for a bearish Gartley pattern. The trade is invalidated if the pair drops to 0.8002 before reaching the entry.

The pattern suggests selling the EUR/GBP if it rallies to 0.8117 (Point D). Point D is located at the convergence of the following points:

78.6% Fibonacci retracement of 01.

127.2% Fibonacci extension of AB.

ABC pattern.

To recap, the pattern suggests selling the EUR/GBP at 0.8117 with our stop placed at 0.8140. Our initial profit target is 0.8082 (38.2% of BC).

- EUR/GBP at 0.8117.">
- 2hr Chart - Sell EUR/GBP at 0.8117.

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Comments (2)

pichurichi_8

July 05, 2012 at 09:13 PM ET

hello Brad. This trade idea is invalid?

bgareiss

July 05, 2012 at 11:33 PM ET

Yes.

Brad

About The Author

Bradley Gareiss has been a technical analyst with GFT since 2008. Brad is known for his ability to identify high probability trading opportunities through geometric pattern recognition. He also focuses on trading psychology and risk management, and has written many extensive articles on these subjects.

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