- The first requirement for the pattern is a new low that exceeds the prior low( Point B and X)
- Point B should be within the range of 1.13 and 1.618. Shouldn't exceed of wave XA
- A rally should followe now, creating wave BC , where it should reach at least near the of wave AB, and can reach up to 2.24.
- A correction of wave BC should follow, the correction should complete wave CD at point D.
- Point D should be around 0.5 retracement of Wave BC . Thats the "Potential Reversal Zone" OR PRZ of the pattern
- This is not a place where you immediately Buy. Its a place to look for buy confirmation signals over the lower time intervals.
As you can see, the pattern on chart is still a potential pattern, and far from complete. So that doesn't mean that we should look to short now looking for a move to point D.
Exclusively Subscribers to my mailing list will get one month access to my trading account . subscribe here http://thefxchannel.com/ ,
My best regards
Get your gift : https://thefxchannel.com
Skype: Technician - The forex channel
Just ran some quick extensions and there is a cluster at 1.4963-1.4970 of a 113 retracement, and a 200% extensions of AB, which coincides with near round number of 1.50, would this not be a bearish shark pattern?
If so then it could be a nice shorting opportunity to then stop and reverse long at the 5.0??
Yep, this is the pattern i posted in the above comment. Okay i have two points here:
1) I am very picky in harmonic patterns. I only use patterns that start from point 0 where 0 is a a clear major high(The point here the whole wave started) . And this is not the case here. (1.48693 is not the start of the wave. it is 1.58194 where the wave started.
2) I give little weight for harmonic patterns, i use them in conjunction with other technical tools. Would never trade upon a harmonic pattern alone.
Hope this clarifies
Your example now completely makes sense as there is no prescribed retracement level for point C - so a reciprocal ab=cd at around 50-61% would indeed be a good long area
Personally I would like the 1.4235 level but we will see...
Odds seem to be pointing at more AUD gains.
Structurally showing HHHL and great bounce from support zone yesterday.
Huge up candles (impulsive) followed by smaller down candles (corrective) in daily.
But I'm wrong more often than right.
Good luck mate.