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