AUDUSD has formed an advance harmonics pattern ab=cd bullish on its hourly chart.
The price is trading above the EL: 0.66128.
ST: 0.65876
Wall: 38% AD: 0.66733
62% AD: 0.67269
79% AD: 0.67600
127% AD: 0.68629
162% AD: 0.69355
The AB=CD pattern is a 4-point price structure where the initial price segment is partially retraced and followed by an equidistant move from the completion of the pullback. This structure has been previously discussed in many technical works, and it represents the basic foundation for ALL harmonic patterns. The Fibonacci aspects in the pattern should occur at specific points. In the AB=CD, the C point will be a defining level for the completion of the pattern. Although the BC projection is critical in this structure, the most significant harmonic number is the exact completion point of the AB=CD.
AB=CD Ratios
In the AB=CD pattern, the alignment of Fibonacci ratios within the structure usually manifests specific reciprocal relationships. The reciprocal ratio of the C point retracement of the AB leg usually indicates which BC projection is utilized to define the Potential Reversal Zone (PRZ). For instance, a 0.618 retracement at the C point typically will possess a 1.618 BC projection that converges closest with the completion of the AB=CD. This reciprocal relationship within the equivalent AB=CD pattern defines the best PRZ for this structure. The reciprocal ratios that complement the AB=CD structure are as follows:
C Point Retracement 0.382 0.50 0.618 0.707 0.786 0.886
BC Projection .24 or 2.618 2.0 1.618 1.41 1.27 1.13
The reciprocal ratios help define the completion of the pattern. However, the most important consideration to remember is that the BC projection should converge closely with the completion of the AB=CD.
The Bullish AB=CD Pattern
The Bullish AB=CD pattern is an excellent measure when looking at a well-defined sell-off. Although the symmetry may vary, this basic structure is a minimum requirement for all harmonic patterns
The C point can be 0.382, 0.50, 0.618, 0.707, 0.786, or 0.886. Referring to the reciprocal ratios listed on the previous page, this correlates into a BC projection that can either be a 1.13, 1.27, 1.41, 1.618, 2.0, 2.24, or 2.618. In some rare cases, a 3.14 projection can be utilized. The Bearish AB=CD Pattern
The Bearish AB=CD should possess a distinct symmetry with the completion point of the pattern complementing the BC projection and defining a precise PRZ.
The C point can be 0.382, 0.50, 0.618, 0.707, 0.786, or 0.886. Referring to the reciprocal ratios, this correlates into a BC projection that can either be a 1.13, 1.27, 1.41, 1.618, 2.0, 2.24, or 2.618. In some rare cases, a 3.14 projection can be utilized.
The price is trading above the EL: 0.66128.
ST: 0.65876
Wall: 38% AD: 0.66733
62% AD: 0.67269
79% AD: 0.67600
127% AD: 0.68629
162% AD: 0.69355
The AB=CD pattern is a 4-point price structure where the initial price segment is partially retraced and followed by an equidistant move from the completion of the pullback. This structure has been previously discussed in many technical works, and it represents the basic foundation for ALL harmonic patterns. The Fibonacci aspects in the pattern should occur at specific points. In the AB=CD, the C point will be a defining level for the completion of the pattern. Although the BC projection is critical in this structure, the most significant harmonic number is the exact completion point of the AB=CD.
AB=CD Ratios
In the AB=CD pattern, the alignment of Fibonacci ratios within the structure usually manifests specific reciprocal relationships. The reciprocal ratio of the C point retracement of the AB leg usually indicates which BC projection is utilized to define the Potential Reversal Zone (PRZ). For instance, a 0.618 retracement at the C point typically will possess a 1.618 BC projection that converges closest with the completion of the AB=CD. This reciprocal relationship within the equivalent AB=CD pattern defines the best PRZ for this structure. The reciprocal ratios that complement the AB=CD structure are as follows:
C Point Retracement 0.382 0.50 0.618 0.707 0.786 0.886
BC Projection .24 or 2.618 2.0 1.618 1.41 1.27 1.13
The reciprocal ratios help define the completion of the pattern. However, the most important consideration to remember is that the BC projection should converge closely with the completion of the AB=CD.
The Bullish AB=CD Pattern
The Bullish AB=CD pattern is an excellent measure when looking at a well-defined sell-off. Although the symmetry may vary, this basic structure is a minimum requirement for all harmonic patterns
The C point can be 0.382, 0.50, 0.618, 0.707, 0.786, or 0.886. Referring to the reciprocal ratios listed on the previous page, this correlates into a BC projection that can either be a 1.13, 1.27, 1.41, 1.618, 2.0, 2.24, or 2.618. In some rare cases, a 3.14 projection can be utilized. The Bearish AB=CD Pattern
The Bearish AB=CD should possess a distinct symmetry with the completion point of the pattern complementing the BC projection and defining a precise PRZ.
The C point can be 0.382, 0.50, 0.618, 0.707, 0.786, or 0.886. Referring to the reciprocal ratios, this correlates into a BC projection that can either be a 1.13, 1.27, 1.41, 1.618, 2.0, 2.24, or 2.618. In some rare cases, a 3.14 projection can be utilized.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.