GBP/CAD Testing Minor Support near 1.75

3 Comments

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Last Updated: 10 min ago

We have a potential short-term GBP/CAD buying opportunity at 1.7487 based on an emerging 4hr bullish Gartley based on the following Fibonacci/pattern convergence:

  • 61.8% of XA
  • 127.2% OF BC
  • AB=CD
  • The key will be for prices to dip to our projected entry at 1.7487 (pattern completion near point D) without first closing above point C (1.1771) 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. Since we are already close to entry, keep an eye out on shorter time frames for these warning sings (15min chart, for example). The initial profit target of 1.7595 (T1) represents a 38.2% correction of the projected CD leg, and the final target of 1.7659 (T2) sits below 61.8% of CD.

    Potential strategy: Buy if prices dip to 1.7487 with stop-loss at 87.54 targeting 88.24 (T1), 88.64 (T2).

    Comments (3)

    arapahoe
    November 24, 2009 at 08:31 AM ET
    Invalidated because of downside momentum, correct? (long bars)
    arapahoe
    November 24, 2009 at 10:00 AM ET
    Really, this trade wasn't invalidated??? If those aren't long bars then what are?
    rstojsic
    November 24, 2009 at 11:59 AM ET
    Arapahoe, a general rule of thumb is 2-3x's the average bar for that particular pair for long bars. I'm assuming that your referring to 15 min bars as i mentioned above? (there obviously were no long bars on the 4hr chart where this trade is based on) Looking at approx. the last 650 15min bars (this can be done by exporting chart data in dealbook360, then opening in excel, for example), the average high-low is 20 pips (open-close is 9 pips) so 40-60 pips (18-36 high-low) would be cause for concern. I agree that it seemed a bit questionable based on the last few bars prior to entry as they were somewhat borderline (biggest high-low was 37 pips prior to entry, and biggest open-close was 30). There were no gaps present (which would have tipped the scales in favor of invalidation), and the low of 1.7476 came in almost exactly at the 127.2% extension of the prior (overnight) 15min upswing (from 1.7503-1.7598) which in turn resulted in a bullish 15min ABCD pattern that also added a bit of confirmation to the buy. In other words, there were more reasons to take the buy then the iffy single long bar warning sign (the more obvious these warning signs are, the better).

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    TRADE RECOMMENDATIONS

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    GBP/JPY
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    Target at 137.51
    GBP/JPY
    Medium term
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    Sell Short from 139.2700
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    Target at 137.58
    NZD/USD
    Medium term
    Opened 2/26/2010
    Sell Short from 0.7141
    Stop at 0.7205
    Target at 0.7055

    QUOTEBOARD

    • Key Quotes
    • Currencies
    • Markets
    •  
    • current
    • high
    • low
     
    • EUR/USD
    • down
    • 1.3691
    • 1.3739
    • 1.3677
    EUR/USD
    5 min chart
    • GBP/USD
    • up
    • 1.5291
    • 1.5322
    • 1.5272
    GBP/USD
    5 min chart
    • USD/JPY
    • up
    • 90.17
    • 90.43
    • 90.11
    USD/JPY
    5 min chart
    • OIL
    • up
    • 82.35
    • 82.74
    • 82.28
    CLJ0
    5 min chart
    • GOLD
    • up
    • 1122.9
    • 1124.2
    • 1120.8
    .GOLD
    5 min chart
    • US Stocks
    • down
    • 10717
    • 10739
    • 10717
    .US30
    5 min chart
    • UK Stocks
    • down
    • 5633.5
    • 5643.0
    • 5633.5
    .UK100
    5 min chart
    • DEM Stocks
    • down
    • 6021.0
    • 6032.4
    • 6021.0
    .DE30
    5 min chart
    • JP Stocks
    • up
    • 10758
    • 10843
    • 10743
    .JP225
    5 min chart
    •  
    • current
    • high
    • low
     
    • EUR/USD
    • down
    • 1.3691
    • 1.3739
    • 1.3677
    5 min chart
    • GBP/USD
    • up
    • 1.5291
    • 1.5322
    • 1.5272
    • USD/JPY
    • up
    • 90.17
    • 90.43
    • 90.11
    • USD/CHF
    • down
    • 1.0560
    • 1.0570
    • 1.0540
    • USD/CAD
    • down
    • 1.0122
    • 1.0129
    • 1.0101
    • AUD/USD
    • up
    • 0.9212
    • 0.9233
    • 0.9196
    • NZD/USD
    • down
    • 0.7130
    • 0.7141
    • 0.7121
    • USD/MXN
    • up
    • 12.4482
    • 12.4590
    • 12.4372
    • EUR/JPY
    • down
    • 123.46
    • 124.21
    • 123.32
    • GBP/JPY
    • down
    • 137.87
    • 138.55
    • 137.66
    •  
    • current
    • high
    • low
     
    • OIL
    • up
    • 82.35
    • 82.74
    • 82.28
    5 min chart
    • GOLD
    • up
    • 1122.9
    • 1124.2
    • 1120.8
    5 min chart
    • SILVER
    • up
    • 17.407
    • 17.492
    • 17.397
    5 min chart
    • US500
    • down
    • 1164.4
    • 1167.4
    • 1164.4
    5 min chart
    • UK Stocks
    • down
    • 5633.5
    • 5643.0
    • 5633.5
    5 min chart
    • DEM Stocks
    • down
    • 6021.0
    • 6032.4
    • 6021.0
    5 min chart
    • JP Stocks
    • up
    • 10758
    • 10843
    • 10743
    5 min chart
    • AU Stocks
    • up
    • 4852.5
    • 4873.5
    • 4842.5
    5 min chart
    Data source: GFT

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