Technician

This is How the 5-0 Pattern Looks Like #forex

FX:EURNZD   Euro Fx/New Zealand Dollar
2829 33 34
This is not a forecast that the pattern will complete. This is just an illustration of the harmonic 5-0 pattern. (Price could go in any direction from current levels).

The Pattern
  • 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 1.618 extension of wave XA
  • A rally should followe now, creating wave BC             , where it should reach at least near the 1.618 extension 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.


Good luck
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1.4400 would be break of trendline.. so it should bounce back from 1.4510/30
+1 Reply
Too early to talk about it, we might not get any correction ...
+2 Reply
Chetan, can you tell the future????
+2 Reply
Both are viable. And yes we may not get any correction. All three are correct :)
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I do not trade these, but I thought that 5.0 patterns were only from completed sharks with 113 and 113 extensions beyond XA, from what you are suggesting here it sounds like the most important extensions are from AB,

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??
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Technician TOP dionvuletich
I dont see any valid shark pattern here. Can you post a chart here..
+1 Reply
Technician TOP Technician
Do you mean this
snapshot
+2 Reply
dionvuletich Technician
Its not valid if the 113 cannot be violated as it is here, I don't really trade these but was interested in your comments above as they differ from what I learnt a while ago

snapshot
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Comment removed
Technician TOP Technician
One more thing, as i mentioned in the post, this is not a 5-0 pattern, its a potential 5-0, we needed a correction to complete the pattern. But it seems like we are not getting it..
+2 Reply
dionvuletich Technician
Sorry I'm confused... how do you get the 5.0 above if your not suing the 1.48693 level? is the 5.0 pattern not this:
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dionvuletich dionvuletich
...or are we mainly just talking about a reciprocal ab=cd pattern within the confines of the fib extensions you mentioned?
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dionvuletich dionvuletich
for some reason I cannot post images outside of tradingview
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Technician TOP Technician
Sorry i mean 0 not X. Correction:

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
+3 Reply
dionvuletich Technician
Thanks Technician - I went back to the Carney book and looked at it again,

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...
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Very nice chart. I couldnt have done it any better.
But NZDUSD W1 pin bar massive sell orders got hit.
Should push your EURNZD higher.
snapshot
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dionvuletich PriceActionTrading
yes it is also on the AUDUSD and GBPUSD
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dionvuletich dionvuletich
= supposed dollar strength
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I would say NZD weakness being triggered as AUD/GBP/EURUSD have not landslide yet.
But both assumption are also true.
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Technician TOP PriceActionTrading
Coming up : AUD Retail sales and China PMI . will AUD Follow?
+2 Reply
dionvuletich Technician
Check the weekly AUDUSD if it breaks the low = bearish kangaroo tail sell signal
+1 Reply
AUD better follow. I am already in short. haha.
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Technician TOP PriceActionTrading
Am afraid its not going to be smooth with the Aussie.
+1 Reply
Casey_Yeo PriceActionTrading
You are very brave to short AUDUSD with that bullish candle close in the daily.
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.
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It feels bullish over the short term for me as well, following the RBA yesterday. But still overall trend is bearish
+1 Reply
Casey_Yeo Technician
Yes. RBA seems confused as well. Cut rate but optimistic about future and further depreciation likely. The best thing is just follow price action on the chart.
Waiting to short at 0.8000-0.8070 zone though.
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Yea i have hope that it is bearish overall. Just no idea how long the uptrend can last. I have been stopped out once already on my AUDJPY
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PriceActionTrading PriceActionTrading
Yes casey, thats the best area to short it. invalidation for me is 0.8020.
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Casey_Yeo PriceActionTrading
If your stop is beyond 8070, your trade has higher change of pulling off. NFP may help you greatly!
+1 Reply
And theres that. Too much news affecting technicals.
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Thanks much. This kind of post is much appreciated.
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EURNZD, the measured move is 1.52. Let's see if we get a pulback.
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Excellent!!!! Congractulation!!!!
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great stuff but the Cpt needs to be a 1.618 minimum to setup 5-0
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