The ebb and flow of the USD is of course the biggest talking point in the financial markets at the moment and the race to the bottom for currencies around the world is something that’s getting temperatures up and causing some fighting words to flow around the world at the moment. With this in mind though this type of action may bring about some interesting setups across a number of different timeframes.
This chart is the 30 min USDJPY and shows the potential placement of an ABC Gartley reversal. The placement of the Fibonacci cluster is key but keep in mind that this doesn’t mean that there is a resistance level there until price has respected it and formed a peak at this level – this means that if it doesn’t do this then there is no trade – with this setup at least.
The trader would typically place their stop on the far side of the Fib cluster once and entry has been made. They may decide to trail their stop x bars behind the price or alternatively set a target (midway between point ‘0’ and point ‘B’ is sometimes used).
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All the best,