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Hi folks,
As discussed last week, we are following on the expected harmonic pattern on the Usd/Chf.
Referring to the daily chart of the last post, we had a bullish divergence & are expecting price to rally into the point ‘C’ of the harmonic pattern.
Now since we are looking at the daily time frame, it will take some daily bars to give us a confirmation of the move, but we could be looking at some consolidation / pause / pullback before the expected uptrend.
There could be a bearish harmonic pattern developing on a smaller time frame, but we will comment on that once we have some confirmations.
As of now, we still have a bullish bias.
Since we are on the follow up, lets follow up on the earlier pattern of the Usd/Jpy on the daily time frame (earlier post of ‘Catching the Butterfly & playing with the Gartley’)
If you compare the chart from that post to this chart, we can see that price reached the expected fib targets precisely…AND bounced from there for the expected longs.
Hence we are still looking for some long targets to be fulfilled.
But let me spoil the party -:)
If price stopped dead at the expected fib levels earlier, then we can safely conclude that we expect price to react at those levels.
As of beginning of this week, we can see that price stopped dead at a 78.6 level….and a trend line resistance.
Can we expect a rejection & hence a bearish move??
The resistance at a 78.6 points to a butterfly pattern, so should we look at a bearish butterfly?
Well, lets wait for price to tell us where it wants to go, but it should turn out to be an interesting exercise.
Sunil Mangwani
Hi Sunil
Its interesting to identify harmonic patterns on longer time frames and follow up on that.
On the Aud/Usd 1hr TF is there a bearish gartley in the making with D @ 0.9800 area, or is it a bullish bat in the making with D @ 0.9550 area? However, if gartley pattern is formed, then there is still a possibility for a bat to form, with the exception that the gartley would have to be re-labelled as a butterfly!!
Does this make any sense??
Regards
su25
Hi Su25,
By the time, I got down to analysing the situation, the price movement has changed the dynamics of the harmonic pattern.
Price has crossed the low of ‘A’ which negates these harmonic patterns.
But with reference to your question, the first thing is that price is dynamic and ever changing. So depending on the fib retracements, the harmonic patterns will keep changing.
If you refer to the previous post of “harmonics within Harmonics” it should make it clear.
The second point - Once a Gartley has formed, there is no possibility of a Bat to form. The parameters of the 2 patterns are very clearly defined and they will not overlap. So, you will either have a Gartley or a Bat. (Again, refer to the previous post “Classifying the harmonic patterns”, which clearly defines the parameters)
Regards,
Sunil.