Key Support Anticipated at 3.03
For now, we anticipate that the 3.03 area will be the maximum retracement for the current pullback. The failure of the 200-Day to hold as support today is short term bearish, as given recent price action around the 200-Day line the expectation was for support to be found on this second test. The first test of the line as support also failed on October 16. This leaves the 50-Day EMA (orange) as the next moving average support area. Potential support around the 50-Day line, currently at 3.04, is strengthened by the internal uptrend line as it marks a similar boundary. It may be hard to see but the 50-Day merged with the internal trendline.
Higher Targets Start at 3.76
Once it occurs, a bullish reversal from support puts the next higher target zone in site. It ranges from around 3.76 to 3.86 and includes the completion of a rising ABCD pattern at 3.78. Once the pattern is complete the potential for a reversal exists. The completion of the ABCD pattern occurs when the CD leg of the advance matches the change in price during the first leg up from A to B. It reflects the tendency of a market to sometimes show symmetry or similarity between swings.
Further, it is a sign of strength if the initial target is exceeded to the upside. That price range also includes the completion of the 23.6% Fibonacci retracement of the full prior downtrend, starting from the August 2022 high.
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