EUR/GBP Buy Approaching, Attractive Risk/Reward

5 Comments

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Last Updated: 10 min ago

The EUR/GBP is showing solid near-term support near .8820 based on an emerging 8hr bullish Gartley pattern projected to complete near the following Fibonacci/pattern convergence:

  • AB=CD (.8823)
  • 61.8% of XA (.8820)
  • 161.8% OF BC (.8844)
  • The key will be for prices to dip to our projected entry of .8847 without first moving above point C (.9239) which negates pattern structure and invalidates this particular setup. Additionally, any gaps and/or wide-ranging candles (2-3x's average) prior to the projected entry (even if the high at point C holds) may invalidate this trade as they are signs that a continuation move may be in progress.

    The initial profit target of .8976 (T1) represents 38.2% of the projected CD leg at which point stops will be moved to break even. The final target of .9069 (T2) sits below 61.8% of CD. If no warning signs are present and this trade is triggered a stop-loss will be placed at .8792--just below 61.8% of XA, and the .8800 barrier--making for a very attractive risk/reward ratio.

    Potential strategy: Buy if prices dip to .8847 with stop-loss at .8792 targeting .8976 (T1, stop to break even), .9069 (T2).

    Comments (5)

    sufibo
    October 29, 2009 at 09:25 AM ET
    Seen that trade too. It is always good to do some analysis and then find a similar trade on your site too! I'm all for taking out profits at 38.2% of the CD leg. A few minutes ago i was in a Buy on CAD/JPY, it hit my take profit but i was thinking of using a trailing stop as it seemed to be moving to 50%. Just closed it out. Trailing trades for me proves quite stressful. So i bag my profits at 38.2 and then look for other opportunities. Thanks Roger, for your analysis. Keep 'em coming.
    rstojsic
    November 02, 2009 at 02:43 PM ET
    thanks, sufibo. you keep reading 'em, and i'll keep writing 'em. :)
    MDion
    October 29, 2009 at 06:44 PM ET
    Hi Roger
    I see this as a potential H&S and therefore would say the NECK line would be much lower than what you have stated, please clarify this
    Regards
    Marco
    rstojsic
    November 02, 2009 at 02:47 PM ET
    hi mdion, can you be more specific as to the h&s you're referring to?
    Lu
    October 30, 2009 at 12:10 PM ET
    MDion... what fundamentals did you use to project your much lower entry point?

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    TRADE RECOMMENDATIONS

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    Buy Buy at .9560
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    NZD/CAD
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    NZD/USD
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    QUOTEBOARD

    • Key Quotes
    • Currencies
    • Markets
    •  
    • current
    • high
    • low
     
    • EUR/USD
    • up
    • 1.3536
    • 1.3626
    • 1.3503
    EUR/USD
    5 min chart
    • GBP/USD
    • up
    • 1.5017
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    GBP/USD
    5 min chart
    • USD/JPY
    • down
    • 90.45
    • 90.70
    • 90.33
    USD/JPY
    5 min chart
    • OIL
    • down
    • 80.58
    • 82.12
    • 79.83
    CLJ0
    5 min chart
    • GOLD
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    • 1105.8
    • 1126.6
    • 1100.8
    .GOLD
    5 min chart
    • US Stocks
    • up
    • 10731
    • 10816
    • 10700
    .US30
    5 min chart
    • UK Stocks
    • up
    • 5647.8
    • 5697.8
    • 5631.3
    .UK100
    5 min chart
    • DEM Stocks
    • up
    • 5979.8
    • 6041.3
    • 5955.0
    .DE30
    5 min chart
    • JP Stocks
    • up
    • 10729
    • 10824
    • 10699
    .JP225
    5 min chart
    •  
    • current
    • high
    • low
     
    • EUR/USD
    • up
    • 1.3536
    • 1.3626
    • 1.3503
    5 min chart
    • GBP/USD
    • up
    • 1.5017
    • 1.5254
    • 1.4987
    • USD/JPY
    • down
    • 90.45
    • 90.70
    • 90.33
    • USD/CHF
    • down
    • 1.0613
    • 1.0634
    • 1.0539
    • USD/CAD
    • down
    • 1.0158
    • 1.0188
    • 1.0060
    • AUD/USD
    • up
    • 0.9163
    • 0.9223
    • 0.9128
    • NZD/USD
    • up
    • 0.7089
    • 0.7156
    • 0.7064
    • USD/MXN
    • down
    • 12.5666
    • 12.6063
    • 12.4924
    • EUR/JPY
    • up
    • 122.45
    • 123.34
    • 122.24
    • GBP/JPY
    • up
    • 135.84
    • 138.08
    • 135.61
    •  
    • current
    • high
    • low
     
    • OIL
    • down
    • 80.58
    • 82.12
    • 79.83
    5 min chart
    • GOLD
    • up
    • 1105.8
    • 1126.6
    • 1100.8
    5 min chart
    • SILVER
    • down
    • 16.977
    • 17.387
    • 16.964
    5 min chart
    • US500
    • up
    • 1159.4
    • 1169.1
    • 1156.9
    5 min chart
    • UK Stocks
    • up
    • 5647.8
    • 5697.8
    • 5631.3
    5 min chart
    • DEM Stocks
    • up
    • 5979.8
    • 6041.3
    • 5955.0
    5 min chart
    • JP Stocks
    • up
    • 10729
    • 10824
    • 10699
    5 min chart
    • AU Stocks
    • up
    • 4847.0
    • 4882.0
    • 4838.0
    5 min chart
    Data source: GFT

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