When defining the PRZ for a , we look at the projection of three levels. I: the of XA, II: an extended AB = CD pattern (in this case 1272 AB = CD) and III: a BC expansion (in this case 2272 BC ). This defines a very tight zone, about 5 pips wide, represented by the orange lines in the chart. There is also some structure near this zone, which increases the edge of a reversal. Should price action test the PRZ and reverse convincingly, I would enter short. SL goes 10 pips behind the next . TP1 = of AD and TP2 = of AD.
There are 66 pips to be made (if this pair follows the script) and the trade has a reward – risk ratio of 2.9!
UPDATE: Price action did not reverse in or near PRZ and broke and closed above X. According to my rules, this Bat was invalidated. No problem, there was no entry signal so nothing was lost. On to the next trade!