USD Index Finds Support at Fibonacci

Friday’s gains respected a Fibonacci cluster, raising the odds of the completion of an ABC move

usd index

USD Index Trading ?

In previous videos I have highlighted the potential for February’s triangle as a potential bearish target, as this is a likely area of potential support. Last week’s low tested the centre of this sideways pattern, which also coincided with a 38.2% and 50% Fib cluster (green box).

We may have seen the end of an ABC pattern which leaves USD vulnerable for a bounce higher. The question then becomes whether or not we have seen the final low of the USD correction, or if it will eventually extend further to make either a Double Zig-Zag or Triple Three. This is something I am definitely not ruling out because even the current correction from the multi-year highs is relatively shallow.

The Weekly candles paint a near-term picture of weakness after 3 successive bearish closes but Friday’s rebound produced a Bullish Piercing Pattern on D1, to show buyers above this level.

usd_index

USD Index Trading ?

If we are to see extended losses then 93 and 91.50 become targets but we will likely have to wait until Friday’s Nonfarm data for such a conviction. For now I suspect the near-term bias favours a bullish bounce if price action on USDCAD and USDJPY are anything to go by.

A break above Friday’s high and / or 95.50 could open up 96 and 96.32 as near-term bullish targets, waiting for NFP data for the final direction for the week.

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