The Cable is about to complete a Gartley pattern at 1.3210-1.3222 price zone as the 24 July GBPUSD harmonic pattern analysis below shows.
Harmonic patterns take Fibonacci ratios from specific points to form a probable price reversal zone. The pattern could precede a minor or major correction or even a change of trend. Thus, GBPUSD is about to complete a Gartley harmonic pattern as the chart below shows.In the last Butterfly pattern spotted on GBPUSD, price did just as expected.
GBPUSD Gartley pattern: what's the price reversal zone?
Charting and harmonic tool from TRADINGVIEW
PATTERN FEATURES
The first leg XA ran from 1.3267 to 1.2958. Leg AB corrects XA at 64.6% (slightly more than the 61.8% required for a Gartley). BC corrects AB at 44% which works well for Gartley (Gartley takes anywhere from 38.2% to 88.6%). The last leg is often a confluence of XA correction at 78.6% and BC extension at anywhere between 113% to 161.8%. To complete this pattern, the last leg, CD should continue to 1.3202 (78.6% correction of XA). At 1.3202 as well, the extension of BC is 149.5% (which falls between 113% to 161.8% required). So we can have a perfect Gartley at 1.3202 . I personally like having a price zone for the reversal. At 161.8%, BC extension ends at 1.3210. 1.3202 is pretty close to 1.3210, therefore we have our price reversal zone at 1.3202-1.3210. In summary, a Gartley pattern could complete at 1.3202-1.3210 price zone.
How to trade this setup
There are different ways to trade Gartley pattern depending on the users preference. The following looks at a few methods.
Method 1: Sell anywhere at the reversal zone with stop loss at 30-40 Pips above the reversal zone. Target can range from 1:1 to 1:5.
Method 2: Waiting for the pattern to complete and sell at about 20-30 pips below 1.3202 with stop loss at 10 pips above 1.3210. Target can range from 1:1 to 1:5.
Method 3: Waiting for the pattern to complete and wait for a reversal signal. The reversal signal can be from any other technical methods.
INVALIDITY: This setup will be invalid if price breaks away from 1.3202-1.3210 zone or it dips below 1.2958 before hitting the reversal zone.
Do you have other views in contrast to the ones listed or you want to compliment them further? let’s know by your comment below.
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