On the technical side, we saw some consolidation the last week after this pair had been rallying the 2 weeks prior. Consolidation breads advanced price patterns and we now have the contours of no less than three harmonics on the 30M timeframe, each with a distinct X-A as the anker leg of the pattern. The two Bats and the have potential reversal zones that converge nicely and in the chart I merged them into one 47 pips wide zone marked PRZ. The profit targets of the individual harmonics converge nicely as well and I merged them into two separate profit zones.
Price has travelled only about 35% on the way from C to the PRZ, so patience is key and I am not jumping the gun. However, should the price continue to rise next week and eventually test the PRZ, I would observe it closely for a potential reversal. In that case I would enter a short, aiming to take profit in both profit zones. SL would go 10 pips behind the resistance.
There are 255 pips to be made (if this pair follows the script) and the trade has a reward – risk ratio of 3.9!
UPDATE: Price is still messing around between the C and D points of these patterns I published 21 days ago. I have now deleted them from my watch list. The patterns did not complete, there was no entry signal and I did not enter any trade here, so nothing was risked and nothing was lost. On to the next trade!