Solid GBP/JPY Sell Emerging...

Last updated 3/11/2010 1:18 PM EST (GMT -5) 6 Comments
Tags: gbp, jpy, gartley

FX360 Technical Analyst Staff

Technical Analyst, GFT

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Last Updated: 10 min ago

Should the GBP/JPY continue to rally off near-term double bottom support at 1.3390, a selling opportunity at 139.12 may present itself based on emerging 4hr bearish Gartley pattern projected to complete near the following convergence of fib resistance...

· 61.8% of XA

· 161.8% of BC

· AB=CD

· 38.2% of CD (daily)

As always, watch out for any gaps and/or wide-ranging candles (2-3x's average) prior to the projected entry as these are signs that a continuation move may be in progress. The stop-loss of 13982 is placed just above projected pattern completion while the profit target of 137.51 sits just above the 38.2% correction of the the 4hr CD leg. These reflect relatively conservative exits considering the GBP/JPY is coming off the longer-term bullish butterfly pattern as seen on the daily chart.

Potential strategy:  Sell if prices rally to 139.12 with stop-loss of 139.82 targeting 137.51.

Comments (6)

silver
March 10, 2010 at 07:55 PM ET
Hey Roger, why would we not buy now for a 500+ pip profit?
BURST
March 10, 2010 at 08:02 PM ET
ye, if we start trading from C to D with tight stop which might be a good trade
silver
March 10, 2010 at 09:28 PM ET
Japan has announced currency intervention which sounds like it should help make this a very profitable trade and then short it to the downside at Rogers sell point D
rstojsic
March 11, 2010 at 09:48 AM ET
well, generally speaking there's really nothing in terms of probability that says this pattern WILL complete. rather, IF the pattern completes then there's a slightly higher probability of a temporary reversal due to the converging fib/pattern resistance. i agree that from a risk/reward stand point it makes sense, but it's a coin flip in terms of probabilities its a coin flip at best especially considering the rather strong bearish undertones (overall trend)
rstojsic
March 11, 2010 at 09:50 AM ET
this, of course, is speaking strictly from a technical standpoint. however, fundamental factors as silver has pointed out could very well dictate near term trend thus increasing the odds of this pattern completing making a buy of point C and target/reveral at D a valid strategy.
silver
March 11, 2010 at 10:40 AM ET
Thanks Roger. I appreciate your knowledge you share with all of us.

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