NZDUSD: Invalid Bat but still a Valid Short

FX:NZDUSD   New Zealand Dollar / U.S. Dollar
A few potential trades on my radar this morning including EURUSD             , AUDUSD             & AUDCAD             (Long from overnight), but one that just caught my attention came on the NZDUSD             .

Even if you're new to reading a price chart it should be pretty obvious that the Kiwi has been in a downtrend. During this bearish movement I've been looking for different places to join the party each time the market puts in an outside return (retracement). Our most recent retracement came in the form of a bearish bat pattern.

Now technically the Bat pattern is invalid because of the "X" leg being penetrated, but it still makes from an excellent opportunity to get short as price action is retesting the highs of our previous pullback. The wick on the "big" candlestick also provides me with some clues about the importance of that level.

There a re a lot of these trend continuation setups out there so it's important that you try and find the best opportunity and not overexpose yourself in the markets.

Akil Stokes
Chief Currency Analyst at http://www.TradeEmpowered.com
Akil@Tradeempowered.com /@AkilStokesRTM
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As I mentioned NU is not short.
i'm still in this trade short to 67c.

Using caution as this is counter trend. Let's see
It isn´t a Butterfly then? Or is the D extension of XA not valid?
+1 Reply
Akil_Stokes Henrik-PatternTrading
No, the B leg requirements for a butterfly never occurred
AH, ok. Still learning patterns. :) What is the requirement for B leg completion?
+1 Reply
Akil_Stokes Henrik-PatternTrading
a 78.6 retracement
Ok. Thx.
good trade settup thank you akil!
+1 Reply
Thanks, we'll see if it wants to cooperate. Either way the risk is small
+1 Reply
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