AUD/CAD

14 jul

The AB=CD pattern is a common harmonic pattern used in technical analysis of financial markets. It is used to identify potential reversal points in the market by comparing the lengths of two price legs (AB and CD) and their corresponding Fibonacci retracements and extensions.

A bearish AB=CD pattern is used to predict a potential price decline. Here’s how you can identify and confirm a bearish AB=CD pattern:

Identify the Pattern Points:

Point A: This is the starting point of the price move.
Point B: The end of the initial move up from point A.
Point C: The retracement of the AB move, usually around 61.8% or 78.6% of the AB leg.
Point D: The projection of the BC move, often equal to the AB move (i.e., AB = CD).
Measure the AB Leg:

The move from point A to point B.
Retracement to Point C:

The BC move retraces 61.8% or 78.6% of the AB move.
Projection to Point D:

The CD move is typically equal in length to the AB move (AB = CD).
Fibonacci Levels:

The AB leg is usually accompanied by significant Fibonacci retracement levels, while the CD leg often aligns with Fibonacci extension levels.
Bearish Reversal Confirmation:

When the price reaches point D, look for reversal signals such as bearish candlestick patterns, RSI divergence, or other technical indicators confirming a potential downturn.