A completed bearish Gartley pattern has appeared on the EURJPY 5-minute chart, with the pattern’s endpoint at 176.814. Historically, harmonic formations, such as the Gartley have an 80% probability of success.
Additionally, on the same 5-minute timeframe, the Relative Strength Index registers above 97% of the last 4,000 readings. Such an elevated RSI is rare for EURJPY, and identifies strong overbought conditions. The price rarely sustains such momentum for long before retracing, making the downward move particularly likely.
Bollinger Bands Show Signs of Exhaustion
The Bollinger Bands serve as another indicator of potential exhaustion. Price currently stands outside the upper band, which is a condition seen less than 5% of the time in price action.
Moves outside the Bollinger envelope frequently precede rapid reversions or at least some correction toward the mean. Those signals together reinforce the idea of entering a countertrend short.
Trade Plan
- Entry: 176.9
- Stop Loss: 177.2
- Take Profit 1: 176.65
- Take Profit 2: 176.475
Read More: Silver Price Prediction: Is Silver Poised for a Major Breakout?
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