A favourable German GDP and Eurozone GDP came out on Friday and there also was some optimism Greece would reach a deal with its creditors next week. This normally should have supported the euro throughout the day, but the market reaction was muted and even somewhat to the downside. The Japanese GDP report Sunday night and the Eurogroup meeting on Monday will give it new impulse, since both are high impact events. This pair has been in consolidation mode lately and consolidation always provides a fertile ground for advanced price patterns. We can now see the contours of both a bearish and a bullish Gartley on the hourly, which I just placed on my watch list for the coming week.
Price has been swinging around a key structure level at 135.13, giving both resistance and support to the PA several times over the last 2 weeks as illustrated by the red circles in the chart. It pulled back into this key level at market close, so I will observe further price developments on Monday to see if it will break or not. I would wait for the bearish Gartley to complete in case the key structure holds and for the bullish Gartley to complete in case it breaks.
No predictions here, this is simply if... then... reasoning and the potential reversal zones (PRZ) for both Gartley patterns have been charted. Should one of them eventually complete and price action test its PRZ and reverse convincingly, I would enter the corresponding trade and trust in Gartley´s market geometry. For both trade candidates SL goes 10 pips behind the next resistance / support level, TP1 = 382 retracement of AD and TP2 = 618 retracement of AD.
For the bullish Gartley, there would be 147 pips to be made (if this pair follows that script) and the trade has a reward – risk ratio of 1.9!
For the bearish Gartley, there would be 98 pips to be made (if this pair follows that script) and the trade has a reward – risk ratio of 1.9!
UPDATE: After some initial sideway action, PA decided to go for the bullish Gartley and tested all three harmonic levels before reversing. TP 1 has now been hit for 99 pips. I rolled SL to break-even enjoying a riskfree trade, hunting for TP2.
Yes I see. It´s the same as with your analysis: whether price action will respect or break support, there is a trade candidate for either situation. Thank you for responding to this trade idea and good luck with the GBPJPY trade!
nigwe
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Nice trade...TP1 hit. 105pips in the bag for me. TP2...here we come! Good job Jasper!
JazzForex
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Thanks! I see you even made a few pips more than I did on TP1, you must have entered at a better price. Well done!
JazzForex
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UPDATE 2: TP 2 has now been hit for 167 pips.
JazzForex
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UPDATE: After some initial sideway action, PA decided to go for the bullish Gartley and tested all three harmonic levels before reversing. TP 1 has now been hit for 99 pips. I rolled SL to break-even enjoying a riskfree trade, hunting for TP2.