GBPJPY: a Deep Bullish Crab in a Bearish Channel

FX:GBPJPY   British Pound / Japanese Yen
This pair has been ranging in a 255 pip wide bearish channel on the 30M for the last 3 days and 18 hours. We can now see the contour of a 5-point extension structure taking shape: a deep bullish Crab pattern. The price comfortably passed the B point on its way towards the potential reversal zone (PRZ) and has progressed 75% on its way to completion point D. Main difference with the standard Crab pattern is the deep 886 B point retracement of the XA leg.

Price action can stall immediately after testing the PRZ and reverse considerably though it might exceed it slightly to test support at 175.55. I will look to enter the trade conservatively, upon signs of reversal within the zone. This means a decisively bullish candlestick must close ( bullish engulfing , tweezer bottoms , hammer or white marubozu ) before entering. SL goes 10 pips behind the next support level . TP1 = 382 retracement of AD and TP2 = 618 retracement of AD.

There are 216 pips on the line and the trade has an excellent reward – risk ratio of 8.4!

UPDATE: PA penetrated the reversal zone and tested all levels (without exceeding it) before reversing and hitting both TP1 and TP2.
You don´t need to be a weatherman to know which way the wind blows - B. Dylan
Wow nice reversal on this one
+1 Reply
JasperForex EmmyTrades
Thank you!
UPDATE: PA penetrated the reversal zone and tested all levels (without exceeding it) before reversing and hitting both TP1 and TP2.
+1 Reply
i am watching the price and planning to trade this gartley
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Thanks, the potential reversal zone of my deep bullish Crab fits into the zone of your Gartley. The pair could follow both our "scripts" and we could both make pips here. Good luck!
I also analysed this pair and found a Gartley on the 60 min that confirms your reversal zone.

+1 Reply
JasperForex Nico.Muselle
Indeed the zones are similar, happy to see that! Good job!
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Nice pattern and Crab Patterns are in general quite difficult to trade as usually there is no structure to fall back upon. However, since we have some previous structure on the 16th around this level, the PRZ looks very realistic to me.
For targets I would look @ 177.25 (slightly above the 382 retracement but) right into previous structure. Target 2 is an option.

Good Job ! I'll keep an eye on it as well :)
+1 Reply
JasperForex Nico.Muselle
Thanks for your constructive comment. I agree retracement patterns are easier to trade than extension patterns like the Crab because you need structure to increase the edge. I thought this one might still be worth it. Agreed as well TP2 is ambitious, after hitting TP1, I would roll SL to break even and enjoy a risk free trade towards TP2 (basically seeing how far it can reach). Your target seems very realistic, good suggestion!
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