Short-Term CHF/JPY Buy Emerging...

Last updated 11/6/2009 1:10 PM EST (GMT -5) 0 Comments - Add your comment

FX360 Technical Analyst Staff

Technical Analyst, GFT

We have a potential short-term CHF/JPY buying opportunity at .87.74 based on an emerging 30min bullish Gartley pattern projected to complete (point D) based on the following Fibonacci/pattern convergence:

The key will be for prices to dip to our projected entry at 87.74 without first closing above the 78.6% of AB near 89.60 which negates pattern structure invalidating 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 88.24 (T1) represents 38.2% of the projected CD leg at which point stops will be moved to break even, and the final target of 88.64 (T2) sits below 61.8% of CD. Stop-loss placement on this one is a little tricky, but for the time being will be placed a few pips below the 161.8% BC extension at 87.54 making for a solid risk/reward.

Potential strategy: Buy if prices dip to 87.74 with stop-loss at 87.54 targeting 88.24 (T1, stop to break even), 88.64 (T2).

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