The US Dollar Index has set up a Fibonacci 3-Point Extension chart pattern on the 240-minute time interval, indicating a possible swing low is in place for the market. This pattern often appears near the end of an initial correction from a long term low, which fits well with the current situation in the US Dollar.
The 3-Point Extension completed at the point labeled C near the 78.20 price level in the Dollar Index futures. The market has crept higher in the last 2 trading sessions, and has not yet confirmed that the low is well-established, but could be with trade carrying higher to first Fibonacci extension level at 78.79, which would significantly strengthen the internal measurements of the formation as well as set up for a possible rally to the higher extension levels.
The near-term price strength coming off of the primary C point suggests that a trade higher into the Fibonacci target range could occur this week, and traders should keep an eye out for possible strengthening of the trend from that point. The upper extension price target is currently projected at 80.39 and may be achieved if this swing low remains in place.
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