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Solid Short-Term GBP/JPY Buy Emerging...

Last updated 11/11/2009 1:50 PM EST (GMT -5) 0 Comments - Add your comment

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FX360 Technical Analyst Staff

Technical Analyst, GFT

The GBP/JPY is showing significant near-term support and a potential buying opportunity if prices dip to 147.80 based on an emerging bullish Gartley pattern (see 2hr chart below). The key will be for prices to drop to our projected entry at 1.4780 without first moving above point C (151.13) which would negate pattern structure thus invalidating this particular setup. If the high at point C holds, warning signs prior to entry include any gaps and/or wide-ranging candles (2-3x's average) as these may increase the odds of pattern completion coming in a bit lower near 147.0.

The initial profit target of 148.96 (T1) represents 38.2% of the projected CD leg at which point stops will be moved to break even (more conservative traders may wish take profits at this level based on price action after entry). The final target at 149.80 (T2) sits just below 61.8% of CD. If this trade is triggered, stop-loss will be placed below the 161.8% ABCD extension (where CD equals 161.8% of AB) at 146.90.

Potential strategy: Buy if prices drop to 147.80 with stop-loss at 146.90 targeting 148.96 (T1), 149.80 (T2).

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