NZD/USD Daily Chart Showing A Bullish Bat Pattern
Here’s the Daily Chart of the NZD/USD pair. There is a Bullish Bat Pattern forming. The XA, AB and BC legs have completed. I’m now waiting for the completion of the CD leg. Below are the relevant Fibonacci Ratio layout of this particular pattern:
- The AB leg retraces to slightly more than 50% Fibonacci retracement level of the XA leg. Good thing is that it did not touch the 61.8% level, which would probably make it a Bullish Gartley instead.
- The BC leg retraces back up to the 78.6% Fibonacci retracement level of the AB leg. I would have preferred it to stop at 61.8% instead.
- The 161.8% Fibonacci Extension level of the AB leg falls at roughly 30 pips below the 88.6% Fib retracement level of the XA leg. I would have preferred them to coincide closer.
- The 161.8% Fibonacci Retracement Level of the BC leg falls almost on top of the 88.6% Fibonacci retracement level of the XA leg.
This is not the most perfect of Bat patterns, but it isn’t too bad too. There is still a strong confluence of Fibonacci levels at Point D. Given the good Risk to Reward ratio for this trade, I think it is a viable trading opportunity.
- Place pending order to buy this pair at Point D
- Stop loss goes 20 pips below Point X
- Target 1 is at the 38.2% retracement level of AD
- Target 2 is at the 61.8% retracement level of AD.
Well, we have to wait and see how it will turn out. All we can do is to identify good setups, formulate a trade plan and then execute the trade plan to the best we can. The rest is in the hands of the Market.
Happy Pip Hunting to All!