It might appear that a Gartley pattern has already completed on this pair, but the true potential reversal zone is defined primarily by the 0.786 XA retracement. The B point is not a precise 0.618 retracement of the XA leg, which is what makes this setup imperfect, and potentially invalid. I would wait to see what price action does in the reversal zone (red rectangle). The PRZ is not that tight due to the AB=CD completion lower than it should be due to the imprecise B point retracement. Trade this pair with caution on this signal. I would wait for a double top in the PRZ on the daily or 4H charts with RSI divergence before even thinking about entry.
Comments
ForceFollower
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I don't know. I'm not that bearish about this pair. I'll still be looking to buy some at dips.
Vighnesh_Iyer
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You are probably right looking at a longer timeframe (W, M). I would expect a pullback when this AB=CD completes, and that might be a good place to buy.
ForceFollower
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No, :-) I'm trading off H1 and H4. When the trend is very strong, then M15. Anyway, me - I wouldn't go short this pair for a while. :-) But you should do what's in your strategy.
dojitrader
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Your ab=cd comment has me looking at this:
The harmonics look pretty good if this is an A-B-C with C
being an ending diagonal. (not the best looking but, it does
have the requisite trend line overthrow)
Perhaps the candlesticks about 1.0290 on the
4/2/1 hr charts will yield a low risk short trigger next week.
Risk/Reward is not too bad if it breaks below support @ B
Good weekend to you all !!!
dojitrader
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Possible suggestions for this pattern would be calling it a Bat,
as I would, because the A to B leg is in the 50's which would
place D @ the .886 thus reducing risk and placing the short
closer to the top of the resistance zone.
Of course that would place the short way up near 1.0540
so a few days to go.
(I call it a Gartley
when the A to B leg reaches at least .60)
Best wishes for lots of pips in 2014 !!!!
Vighnesh_Iyer
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It could possibly be interpreted as a bat pattern, but I find that those rarely exceed the 0.50 XA retracment. Good suggestion, but I probably will pass on whatever signal comes out of this. Might have to wait a while for a bat to complete.