The harmonic Crab is a tough harmonic pattern to trade since price will typically be volatile near the pattern completion zone or Potential Reversal Zone (PRZ). The current price action on GBPJPY is interpreted as a Bullish Crab Harmonic as per our analysis - The internal legs of the patterns are off by a few decimal points from the strict definition, but considering the pattern is seen on GBPJPY which is relatively more noisy, we take this as a valid pattern. Such patterns offer good trades risk reward ratios and cannot be traded by automated strategies. ForexSignalPort MT4 EA will be used to execute and manage this trade automatically. You may trade this setup manually if you prefer as per our recommendation and including your own interpretations of the price action.
- Symbol : GBPJPY
- Analysis time frame D1
- Original Recommendation Date : 2nd Jan 2019
- Last Update Date : 3rd Jan 2019
- Current positions : INDEX short @ 139.82 (entry date 31 Dec 2018)
- Pattern : Bullish Crab Harmonic Pattern
- Potential Reversal Zone : 133.85 ( XD = 1.618)
- Likely Reversal Zones :
>0.618 Fib level : 136.97
>Low of April 2017 : 135.60
- Possible Short setup @ 139.70
- Expected during 2nd week of Jan 2019
- Validation of setup on:
Price bounces off 0.618 fib level
No H1 close above 139.80
- Stoploss : 140.10 (-50 pips)
- Target Price : 137.00 (+270 pips)
- Risk:Reward : 1:5
- Provides good R/R setup before PRC zone is seen
- Set up valid if price reaches 135.60 level over next 5 weeks.
- Enter LONG on H1 reversal in zone 135.70-135.90
- Server Side Stoploss : 100 pips
- Hidden SL : H1 closes below 135.60 (~50 pips)
Trade Invalidated on multiple close below support line (lack of buying interest)
- Target Price : +400 pips
- Risk:Reward = 1:4
- Server Side SL move to 135.90 after floating gain crosses +100 pips
Allow room for reaching higher gains.
- Yen surged during low liquidity hours just after EOD hour.
- GBPJPY dropped sharply by about 600 pips long with other JPY pairs
- Current positions : INDEX short @ 139.82 was closed for a gain of +600 pips
- The Potential Reversal Zone (D point - 1.618 fib) along with other supports were breached briefly (~30 mins)
- We consider the Phibase Technical Trade Setup #2 (Crab Pattern) to be still in play with PRZ level still at 133.80
- The spike below PRZ was during very low liquidity and sharp pull back was seen at 0.786 fib level
- The Price is consolidating above PRZ and provides good risk/reward entry around 133.90 to 134.20
- SL of 100 pips and hidden SL below 133.50 (H1 close below of 133.80 may weaken pair further)
- Phibase Technical Trade Setup #1 was invalidated on break below 0.618 feb level and April 2017 low
- GBPJPY has recovered from the flash crash seen on 3rd Jan
- Current positions : INDEX Long @ 135.95 (entry date 8 Jan 2019)
- Price is approaching Short setup @ 139.70 suggested in Trade Setup #1
After the flash crash, this level was not expected to be seen during our earlier update on 3rd Jan
- 140.3 levels is the 50% Fib level of the leg between 8 Nov 2018 to 3 Jan 2019.
- Trade Setup #1 to short GBPJPY is valid again with potential retracement towards Point D
- UK Parliament vote on Brexit during next week added weight-age to short around 140.10 to 140.30 level
- Stoploss above 141.00 level or 100 pips which ever is higher
- Targetprice : 136.0 (~ +400 pips)
- This trade offers good risk:reward
- The short trade will be hedging the current INDEX Long trade - hence will not add to risk
- GBPJPY has been resisted at the lower bound of our expected resistance zone.
- Current positions : INDEX Long @ 138.77 (entry date 11 Jan 2019)
- Price is retraced back from 138.55 suggested in Trade Setup #1
- On H1 time frame we can associate a harmonic crab pattern
- The D (PRZ) can be seen around 140.30 to 140.60 range which is in agreement with 50% Fib level of the leg between 8 Nov 2018 to 3 Jan 2019.
- UK parliament vote on 15th Jan 2019 (tomorrow) could provide an opportunity for price to get into this resistance range
- However, entering short position will not be advisable prior to the high risk event.
- Based on UK vote/GBP reaction, we expect to find suitable price action to enter short around 140.30 (SL just above 141 or 100 pips which ever is higher)
As per our expectation, the UK vote was seen to be GBP positive and the pair has rallied to the next resistance zone. Current positions : INDEX Long @ 139.81 (entry date 15 Jan 2019) and currently with gain of +200 pips Price is retraced back from 142.22 which coincides with 161.8 Fib levels
The current short trade will hedge the LONG GBPJPY INDEX trade Server side SL is placed at 100 pips, hidden SL will be taking effect on break of 142.30 Server side TP is placed at 500 pips, hidden TP will be resistance turned support levels of 140.90-140.30. Expected R/R from this trade will be 1:3 (Risk 50 pips, Reward : 150 pips) The manual trade also serves as a means to protect gains of INDEX long against any Friday sell off that may see a sharp drop.