AB=CD Patterns with Rectangular Channel on GBPJPY
I have been watching this pair closely and found several interesting setups. For the bast few days, GBPJPY has been in a continuous bull trend making new structure highs and higher lows (take a look at the red rising trend-line as well). I see couple of setups. (1) a Bullish AB=CD pattern (Blue Arrows), (2) a Bearish AB=CD Pattern (Pink Arrows), and (3) a rectangular channel (red Arrows + horizontal trend-lines).
Let's look at each of them individually.
Bullish (Blue Arrows) AB=CD Pattern:
We see that the pair has retraced down to the 0.618 AB retracement and the completion is at a 1.414 BC extension. What is also interesting is that this is where we find a 1.272 AB extension.
Bearish (Pink Arrows) AB=CD Pattern:
In this situation, I find that the pair retraced back to a 0.382 AB retracement and the completion is around a 2.618 BC extension and a 1.618 AB confluence.
Both AB=CD patterns do seem to be a perfect area to go short/long on the market. But for the ride up the completion leg, we can take advantage of the consolidation/rectangular channel (red horizontal lines). The target (after a breakout) is shown as red arrows and both directions match levels of structure. This would be great for a quick profit while waiting for the AB=CD completion... but also can be used to ride the completion leg of the pattern to really get more profits (of course... control the greed aspect :D)
Trade wisely, Trade responsibly.
Let's look at each of them individually.
Bullish (Blue Arrows) AB=CD Pattern:
We see that the pair has retraced down to the 0.618 AB retracement and the completion is at a 1.414 BC extension. What is also interesting is that this is where we find a 1.272 AB extension.
Bearish (Pink Arrows) AB=CD Pattern:
In this situation, I find that the pair retraced back to a 0.382 AB retracement and the completion is around a 2.618 BC extension and a 1.618 AB confluence.
Both AB=CD patterns do seem to be a perfect area to go short/long on the market. But for the ride up the completion leg, we can take advantage of the consolidation/rectangular channel (red horizontal lines). The target (after a breakout) is shown as red arrows and both directions match levels of structure. This would be great for a quick profit while waiting for the AB=CD completion... but also can be used to ride the completion leg of the pattern to really get more profits (of course... control the greed aspect :D)
Trade wisely, Trade responsibly.
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