One of the simpler harmonic patterns is the AB=CD equivalent configuration, which graced the H1 chart of USD/JPY in recent trading.

Active AB=CD Pattern

Denoted through a 100% projection at ¥132.09, we can see that short-term price action rebounded from the AB=CD termination point in recent trading in a market echoing an uptrend. Regarding upside targets, many Harmonic traders will be watching the 38.2% and 61.8% Fibonacci retracement ratios, derived from legs A-D at ¥132.79 and ¥133.27, respectively.

Technical Confluence

Accompanying the AB=CD pattern is price shaking hands with the lower Bollinger Band (set to three standard deviations) and the Relative Strength Index (RSI) exiting oversold territory. Therefore, the supporting technical confluence—momentum and volatility indicators—suggests a short-term push to the upside may unfold, targeting the aforementioned Fibonacci retracement ratios.

Charts: TradingView

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