GBPUSD potential harmonic pattern set ups
GBPUSD is shaping up for a couple of potential bat harmonic patterns. In an Elliott wave correction, it is quite common to have one harmonic pattern complete, for example as a bear bat, and then form another bull harmonic pattern later. The emotion of trailing a stop behind profit on the first pattern can make us miss the next opportunity, because it is contrary to our desire for price to continue in the direction of profit for the initial harmonic pattern. I have seen and traded 2 and 3 consecutive harmonic patterns like this.
The two potential harmonic patterns shown on the 4H GBPUSD chart are, firstly, a bear bat with the RSI approaching over bought. The daily chart shows a couple of trend lines, one of which nicely coincides with the 88.6% retrace of the orange XA for this harmonic pattern. The other trend line offers further potential resistance below the orange X level. Interestingly, GBPCAD (tanks pretty cousin) has already completed a bear bat harmonic pattern, as mentioned in last post. Is this a harbinger for GBPUSD to do the same soon or will it simply collapse before completing the harmonic pattern?
Lets wait patiently and see if either harmonic pattern develops.......fore warned is fore armed!
GBPUSD 4H April 2012 bull & bear bat harmonic patterns A
GBPUSD Daily April 2012 bull & bear bat harmonic pattern A
GBPCAD bear bat harmonic pattern update
The GBPCAD bear bat harmonic pattern set up, posted earlier in the week, made a nice 120 pip drop into and past T1. Unfortunately, I didn't get filled on this trade as price reversed about 13 pips below my entry point (88.6% retrace of CD) for the harmonic pattern.
Again, we are always wise in retrospect, "front running" this trade would have been a good idea looking back, but when price exceeds your entry point and puts you in the red enough times then "front running" seems less attractive. In saying that I do front run some trades. In the instance of this harmonic pattern 15 pips more risk to gain 100 pips would have been nice.
There will always be other opportunities, whether you use a harmonic pattern or some other method. I believe it is a valuable exercise to post mortemize (I just invented that last word ending) the near misses and the losers, as well as the winners.
GBPCAD 1H April 2012 bear bat harmonic pattern B
EURUSD 4h March 2012 B bear gartley-bat
GBPCAD potential harmonic pattern set ups, bear bat & gartley
Keeping an eye on the GBPCAD on the 1H chart to see if it develops into a bear bat harmonic pattern with it's PRZ at the 88.6% retrace of XA. It is already diverging on the 1H and coming up to over bought on the 4H. The daily chart shows a larger potential bear gartley harmonic pattern with nice 61.8% retraces so far for points B and C.
The smaller bear bat harmonic pattern can be seen on the daily chart (within red rectangle) to have its potential 88.6% PRZ in close proximity to a descending upper channel line. The latter may act as significant resistance, thus re-enforcing the PRZ of the harmonic pattern.
Again, the larger harmonic pattern often dominates, so initial targets for the smaller pattern should be non-aggressive. If resistance at the upper channel line, seen on daily, is breached then there is a good chance of the larger bear gartley harmonic pattern forming it's CD leg. The weekly chart shows a complex Elliott Wave correction after a significant down trend.
GBPCAD 1H April 2012 bear bat harmonic pattern A
GBPCAD Daily April 2012 bear bat & gartley harmonic pattern A
NZDJPY bull gartley harmonic pattern hits T1 for 85 pips profit
The larger NZDJPY bull gartley harmonic pattern posted last week on daily chart did in fact take precedence, completing and reversing within 15 pips of the 88.6% fibonacci retrace of XA to rally into T1 for 85 pips profit. The the smaller bull bat/gartley harmonic pattern posted last week, also proved profitable as it hit it's T1.
Often the larger harmonic pattern has dominance, so it is prudent to keep profit targets on the smaller pattern modest or conservative.
It's often a question of what comes first the chicken or the egg, fundamentals or technicals? For me technical tell me when, to a high degree of probability when the egg will be laid and how big it might be. Therefore, it doesn't really matter which came first.
Second half on this harmonic pattern to breakeven.
NZDJPY 4H April 2012 C bull gartley harmonic pattern
NZDJPY Daily April 2012 A bull gartley harmonic pattern
GBPCHF bear gartley bat harmonic pattern update
The bear bat/gartley harmonic pattern posted earlier in the week has managed to turn 9 pips or so above the 88.6% fibonacci. The PRZ of the harmonic pattern has been tested 3 times. It has formed a lower upward pointing trend line and has tested this lower trend line several times. If price manages to break support at this trend line then there is a high probability of attaining T1 (14524), which is a 38.2% fibonacci retrace of CD and lies just above the previous significant structure of the B point of the harmonic pattern.
The 30 minute chart also shows a structural support zone between 14550-14535, again if this is broken downwards then T1 based on the harmonic pattern is more likely to be hit.
GBPCHF 4H April 2012 B bear bat gartley harmonic pattern
GBPCHF 4H April 2012 A bear bat gartley harmonic pattern