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EUR/JPY Forming Unique Bullish Pattern

Last updated 3/13/2009 6:32 PM EST (GMT -5) 0 Comments - Add your comment

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Bradley W. Gareiss

Technical Analyst, GFT

The EUR/JPY has consistently risen since January 21st without seeing much of a correction.  Therefore, we are ideally looking for a bullish pattern to take advantage of the uptrend.  There is a bullish 3 drives pattern forming on the 15min Chart of the EUR/JPY.  The 3 drives pattern is a fairly rare pattern that can help accurately project support or resistance while offering an excellent risk-reward ratio.

We are looking to buy the EUR/JPY at point 3 (125.47).  Point 3 is located at the convergence of the following points:

The EUR/JPY 15min Chart clearly shows excellent symmetry over the past five price swings.  However, the  the most important leg in the pattern still must complete (C3).  In a 3 drives pattern, time symmetry is even more important than in our more commonly used patterns.  If the pair rises above above 126.90, the trade will be invalidated until the trade is updated on FX360.com.  Additionally, the trade will be invalidated if we see long bars in the C3 leg.

To recap, we will look to buy the EUR/JPY at 125.47 with our stop placed at 125.05.  Our initial profit targets are 126.20 (38.2% of A3) and 126.75 (61.8% of A3).

8hr Chart - Steady uptrend over the past couple months.	15min Chart - Bullish 3 Drives Pattern; buy @ 125.47.

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