This pair is signing lower highs lower lows and broke below the B-point of the potential bat pattern. We already saw a spike into the potential reversal zone (yellow) on Friday and it since failed to break above the previous high leading me to thinking that a further descent certainly is possible. The bat completes at the .886 retracement of XA which is confluent with the 1.618 extension of AB.
This is a longer term trade (most probably a couple of days) and the Risk/Reward ratio is good. However, as X is over 100 pips away and stops need to go below that we are looking at a quite large stop loss, so make sure that you check the risk profile before you enter this trade. A potential reward of 270 pips to target 1 and 450 pips to target 2 could be yours.
Good luck and may the pips be with you !
Komentarze
TradeYodha
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On daily chart it is showing probable harmonic behaviour. Even on 4 hour it is harmonics I believe. My zone is at 61.8 fib retracement level. Would love to hear your thoughts please.tradingview.com/v/JhLnC8Qg/
Nico.Muselle
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It is difficult to compare a daily chart with a daily chart as the timeframe is 6 times as big. On the daily chart I think we currently reached the .382 retracement of the previous move up. The overall trend on the daily is still bullish, so a trade in that direction certainly is not a bad idea. Nevertheless, on the daily we can logically expect a further retracement to the downside into previous structure as you indicated. What I am looking for is a small retracement to the upside which is definitely possible given the reasons I specified in my chart.
So, summarized, daily could see some further downside, 240 a small retracement to the upside very likely. Does that answer your questions ? :)
TradeYodha
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great. Thanks mate. Appreciate your comments
Nico.Muselle
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You are welcome, thanks for looking into my ideas as well ! :)
PipFish1
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Great job of reading the bars Nico!
Nico.Muselle
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Welcome ! And even if the pattern was completed, we did not reach TP1 yet. Often we see a re-test of the PRZ before the actual reversal kicks in, that is what I am actually looking for in this case.
DuKe_QC
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Just curious about this pattern... why did you not complete it with the wick of the 3rd candle from the right ?
FeelsFX
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same question here
Nico.Muselle
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Excellent question ! My belief is that price action will go down again to this level hence my reason to still draw in the pattern. If I would complete the pattern with that wick down, the pattern would have been completed (in theory it is), and I would be late to enter the trade. Since price failed to break to the updside a create a new high, I still think there is potential for downside and (re-)completion of this pattern. Only time will tell, but I put it on my watchlist ! :)
Nico.Muselle
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With re-completion it could actually create a double bottom, which would be an extra confirmation to go long. :)