NZDJPY Price Trend moves as a bearish BAT

Harmonic price patterns are those that take geometric price patterns to the next level by utilizing Fibonacci numbers to define precise turning points. Unlike other more common trading methods, harmonic trading attempts to predict future movements.

A Bat pattern is completed when the price approaches the 0.886 retracement level of XA leg. Despite this, we shouldn’t enter in the market just when price touch this validation level.

Indeed, D point is used to identify the so-called “potential reversal zone”, an area on the chart in which we might expect a change in the underlying price action.

Within this PRZ, we search for potential signs of weakness or strength that might cause the price to reverse: examples about entry filters we might use are specific candlestick patterns or smaller chart formation as you can see in the example below: