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Hi,
We leave harmonics aside for the time being & have a look at a possible bearish Head & shoulder pattern on the Nzd/Usd weekly chart.
The chart shows the pattern which is quite symmetrical and price has broken the neckline.
So do we expect the downtrend to go to the expected targets?
Well, as always, price can do funny things, and especially when you are very sure of something.
So lets take things step by step.
If we drill down to the daily time frame, we can identify a harmonic pattern at the neckline.
Now I said "a harmonic pattern" and not "the harmonic pattern", because these fib ratios do not fit into any of the regular patterns that we use - the Gartley, the Bat & the Butterfly.
This is an ABC correction, which follows the principles of the harmonic patterns.
But the first corrective wave to the 38.2 level & the second corrective wave to the 61.8 level, is not part of any of the above mentioned patterns….which just goes to show that the harmonic patterns are very specific in structure & hence very accurate.
Now should we name this particular pattern as the "Sunil pattern" ??? he.he.he. !!!
Anyway coming down to business, price reactions around fib levels are quite accurate & this pattern did push price to break the neckline of the larger H & S pattern.
Hence we can expect price to continue to the harmonic price targets - the 127/161 fib projection of c-d.
This should push price well into the territory of the H&S target zone, which could set the tone for further down moves.
So, another long term pattern to follow.
Such large moves with the correct money management parameters, should more than take care of the smaller losses that one would have incurred.
Sunil.
I listen to your webinar enjoyed it, thank you, could you please show again the EUR/USD chart, and explain it. Thank you