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EUR/GBP Reaches Strong Resistance.

Last updated 3/9/2009 8:01 PM EST (GMT -5) 0 Comments - Add your comment

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Bradley W. Gareiss

Technical Analyst, GFT

A bearish Gartley on the EUR/GBP 8hr Chart has recently completed.  We originally looked at this pattern in a feature on ( 2/24/2009 ).  The pattern does not have perfect time symmetry, but it is a valid pattern.  Ideally,  you have already entered this trade.  However, it is possible to enter this trade if it reaches our entry again before reaching the first profit target.

We sold the EUR/GBP at point D (0.9181).  Point D is located at the convergence of the following points:

The pattern entered above the bearish trend line, but the downtrend is still valid.  It is possible to pierce a trend line without invalidating it.  However, if this pattern is stopped out, we will consider the trend line to be seriously broken.  We have also moved our profit targets lower.  The reason is that the trade reversed more quickly than we estimated originally.  We generally estimate that the pair will shoot past the entry to have conservative profit taking levels.  However, this trade reversed only 6 pips past the entry.  These profit levels could change again, so it is advised to watch for features in the coming days which may update this trade again.

To recap, we sold the EUR/GBP at 0.9181 without our stop placed at 0.9277.  Our profit targets are now 0.9017 (38.2% of CD) and 0.8909 (61.8% of CD).  Remember, if you have not entered the trade, it is possible to enter the trade at 0.9181 unless it has already hit the first profit target.  However, if we achieve the first profit target before entering the trade, it is no longer prudent to enter the trade.

8hr Chart - Bearish trend.	8hr Chart - Bearish Gartley; sell @ 0.9181.

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