AUDUSD: a Bullish Bat with an oversold RSI

FX:AUDUSD   Australian Dollar/U.S. Dollar
We have a Bat pattern finishing on the 30M chart. Price already tested the PRZ (and overshot it a little, but could still stabilise and reverse nicely) and the RSI is clearly oversold. When defining the PRZ for a Bat pattern , we look at the projection of three harmonic levels. I: the 886 retracement of XA, II: an extended AB = CD pattern (in this case 1272 AB = CD) and III: the BC             expansion (in this case 2000 BC             ).

It is common for these harmonic levels to converge closely, defining a precise range. In this case, the three numbers define a clear zone of harmonic support, represented by the orange lines in the chart. If this pair follows “the script”, price action (PA) will stabilize and reverse.

Once we see PA reverse convincingly, we will enter the trade. SL goes 10 pips behind the next relevant support level (X). TP1 = 382 retracement of AD and TP2 = 618 retracement of AD. There are potentially 120 pips to be made and the reward – risk ratio of this trade is 3.0.
You don´t need to be a weatherman to know which way the wind blows - B. Dylan
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