This is the quick update of my previous post of $NZDUSD. Kiwi dollar pulled back to 78.6% of the most recent down swing, the risk was back in town during the Wednesday session. And the bearish Butterfly pattern is still alive for now. I am watching the development of this pattern.
As always, it is easy to find a chart pattern or setup, but the essential skill is to learn how to manage a position. One setup, one pattern, can lead to different sets of result.
Here is the updated chart.
Again, here are some details of the pattern recognition I found it on FX360. Check out the website for details.
The bearish butterfly Pattern Rules
- The swing from A to D is a 127.2% or 161.8% extension of XA
- Note: D must be above X
- A valid ABCD must be observed in the extension move (AD)
- Additional confirmation may be attained when the times of the XAB and BCD triangles are in proportion
- A move beyond 161.8% negates the pattern and may suggest a potentially strong bullish continuation
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