Wednesday January 6, 2010 - 19:41:57 GMT
Share This Story
FXTimes - www.fxtimes.com
GBP/JPY Throwback Confirmed; Assessing Targets and Reward-Risk Ratio
Daily Technical Update
January 06, 2010 (GBP/JPY) Throwback Confirmed; Assessing Targets and Reward-Risk Ratio.
- Daily: The reversal of the GBP/JPY pair yesterday was indeed just a throwback as todayâ€™s return to the rally confirms. (Refer to Daily Technical Update 1.05.2010 GBP/JPY). The 146.00 area remained as support in the Asian session and the market has climbed to 148.00 by the start of the US session.
- Looking at the 4H time-frame, we can see very clear bullish
engulfing pattern suggesting bullish reversal. The stochastic is
showing some start of bullish momentum. This suggests we may have one
more swing to test our resistance areas, the 153.00 area being one of
- Looking at the 1H time-frame, we can see a more conservative target
(T1) at the 149.00 area (61.8% retracement). The (T2) is the 150.70
area, which is about 100% retracement back to the double top. Finally,
the aggressive target is at 153.00, between 150% and 161.8% expanded
- From these targets, the medium one has a reward to risk
ratio of 1.86:1, using 3xATR methodology to define stop-loss level,
which would be about 144.65. This also assumes, the trigger at 146.85,
a break from the double bottom at 146.00.
- In the near-term, we do see that the 1H stochastic is overbought, and we are testing a powerline at about the 148.00 area.
- Also in the near-term, we may have some resistance at the 149.00
target since this would spell the completion of a bearish gartley.
Commodity Trading Advisor
Information and opinions contained in this report are for
educational purposes only and do not constitute an investment advice.
While the information contained herein was obtained from sources
believed to be reliable, author does not guarantee its accuracy or
completeness. CMS will not accept liability for any loss of profit or
damage which may arise directly, indirectly or consequently from use of
or reliance on the trading set-ups or any accompanying chart analyses.
Foreign currency trading is not conducted on an exchange. CMS is
acting as a counterparty to its clientsâ€™ transactions and as a result,
CMSâ€™ interests may be in conflict with its clients. Since CMS acts as
the buyer or seller in the transaction one should carefully evaluate
any trade recommendation provided by CMS or any of its solicitors.
Foreign currency trading involves a substantial risk of loss and may
not be suitable for all investors.
All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."