Here on the Euro we have a 222 pattern that fits due to the 3% tolerance outlined in the Harmonic Trading Volume 3 book Scott Carney published in 2016 (I THINK). The white line is the HOP Level for the Pattern! We have a classic Bullish Flag Pattern that has formed on the Daily chart and there is about 300 pips from PA now to the HOP Level. If PA closes above the trend line i will be entering the trade to take the trade to the HOP Level. **Reasoning Later**
The HOP Level is the make or break for any pattern and i do expect this pattern to give us atleast a T1 setup.
Reasoning for the entry...
The Euro has been a strong buy for the past couple of weeks with the Commercials selling decent amount of shares and the Non-Commercials buying the shaes up driving the Euro Higher. I do see the euro driving this pair higher as more and more traders are shorting the pair thinking we have hit the ceiling and yet the paradox continues because we think it cant go higher and it does. and the COT suggests it is. And in combination with that the DXY is finally bearish on the COT and the dollar is about to fall some more with the Commercials and Non-Commercials finally switching sides. The Commercials are buying shares off the non-Commercials and the Non-Commercials are selling which is causing the dollar to sink. which will cause this pair to easily go higher. I suspect this pair to make it to the HOP level by the end of the week and reverse to a Type One set up off the HOP making the move the correction in the trend and continue higher. it is very possible for this pair to exceed the HOP and just keep moving higher. only time will tell!
The HOP Level is the make or break for any pattern and i do expect this pattern to give us atleast a T1 setup.
Reasoning for the entry...
The Euro has been a strong buy for the past couple of weeks with the Commercials selling decent amount of shares and the Non-Commercials buying the shaes up driving the Euro Higher. I do see the euro driving this pair higher as more and more traders are shorting the pair thinking we have hit the ceiling and yet the paradox continues because we think it cant go higher and it does. and the COT suggests it is. And in combination with that the DXY is finally bearish on the COT and the dollar is about to fall some more with the Commercials and Non-Commercials finally switching sides. The Commercials are buying shares off the non-Commercials and the Non-Commercials are selling which is causing the dollar to sink. which will cause this pair to easily go higher. I suspect this pair to make it to the HOP level by the end of the week and reverse to a Type One set up off the HOP making the move the correction in the trend and continue higher. it is very possible for this pair to exceed the HOP and just keep moving higher. only time will tell!
Comment:
Took a month but the HOP has been tested. A month to make 300-ish pips... with all the swap fees for a month... i wonder how much one would of walked away with...
Comment:
now, with the hop level tested (which is the make or break for any harmonic pattern) i think this pattern might be invalidated becasue the COT Report is still showing the hedge firms buying the euro from the big coperations hedging their positions to lock in exchange rates. At this point in time the Euro seems to be on a run-away train as with every week that comes out the gap from the zero line increases between the Commercials and Non-Commercials.