EURUSD Daily Chart: Bearish Harami On 61.8 Fib Level, Should I Sell?

John, one of the traders that visits this Forex trading site of mine,  made this comment and asked some questions and since I had issues trying to upload image to my comment.

I decided to write a quick post about it in reply to him but maybe this will also help other traders that may come cross this:

Thanks Rkay for your website. I’ve noticed a bearish harami form on the daily EURUSD CHART with a confluence of a downward trend line.

Also As feedback, I’ve drawn a fib retracemtent level from 1.16150 as swing high and swing low at 1.09521 which is where a bullish hararmi was also found !!! Is that correct procedure in drawing fib levels.  Thanks feedback would be greatly appreciated

Here’s what I think about the Fib and Harami:

• bearish harami forming when price hits 61.8% fib level and some will consider it as a good sell signal  but I’m not a big fan of taking trades just based on this kind of situation. I’d rather have one other layer added to it to make me confident of taking this trade setup.
• trendline is IRRELEVANT…there’s no confluence at all with this downward trendline.
• I wouldn’t be trading this setup at all based on the daily timeframe.
• note the potential resistance zone above? Price is also not even close. So confluence here is really out of question.

Here’s a chart showing what John was talking about:

Summary

Not an ideal trade setup in my opinion. You should stay out of it.