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Bonus Trade: EUR/USD to See Significant Support at 1.2195?

Last updated 7/19/2012 7:49 PM EST (GMT -5) 2 Comments

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A bullish pattern is currently forming on the EUR/USD 30min Chart.  There are several reasons that we are looking for support at 1.2195.  Our entry would fulfill the criteria needed for a bullish Gartley pattern because point C lines up with two key Fibonacci levels. These three levels create a higher probability of new support than a random price, which will hopefully give us an edge.  Furthermore, this is a short term trade that adds to our position within our long term bullish EUR/USD idea.  The trade is invalidated if the pair rallies to 1.2293 before reaching the entry.

The pattern suggests buying the EUR/USD if it drops to 1.2195 (Point D).  Point D is located at the convergence of the following points:

To recap, the pattern suggests buying the EUR/USD at 1.2195 with our stop placed at 1.2175.  Our initial profit target is 1.2225 (38.2% of BC).

• • EUR/USD at 1.2195.">
    
  • 30min Chart - Buy EUR/USD at 1.2195.

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Comments (2)

PROBY

July 23, 2012 at 08:55 AM ET

Wrong

bgareiss

July 25, 2012 at 01:59 AM ET

I deleted your other comment because it wasn't appropriate. Some trades win, some trades lose. With a risk:reward ratio of 1:1.5, one needs to win 4 out of 10 trades to break even. Winning 50% of the time like that other comment suggested would actually lead to extremely favorable results in the long run.

Brad

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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.