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EUR/JPY Triggers High Probability Sell Entry

Last updated 2/5/2009 1:29 PM EST (GMT -5) 0 Comments - Add your comment

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FX360 Technical Analyst Staff

Technical Analyst, GFT

The bearish Gartley pattern discussed yesterday's technical analysis feature article, " EUR/JPY: Long, or Short? " has been achieved triggering our sell entry at 117.97. The EUR/JPY spiked to an intraday high of just under 119.00 before prices quickly dropped to around 118.00 and are expected to fade as prices come off daily bear trendline support.

The recent high of just under 119.00 comes to 88% of XA, and 161.8% of BC--still a valid gartely and as a result below our stop-loss, but requires some re-configuration of the projected profit targets. Because these profit targets were initally based on 38.2% and 61.8% retracements of the projected CD leg prices will need to be adjusted to reflect the actual CD leg. This means that T1 now sits at 117.31, and T2 at 116.17.

As is typically the case, stop will be moved to break-even once our inital target (T1) is achevied and partial profit will be taken, then we'll look for T2. Although the bear trendline adds a considerable about of confirmation to the short side, the wide-ranging candle at the completion the CD leg is a corncern as this may indicate prices could continue to rise after only a brief correction (thus the adjusted, conservative inital target of T1).

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