This pattern reflects a deep retracement to support levels. Considering the rate cut and G7 weekend meetings this move is playing out presumably as funds and players cut longs. The intention will be to re-establish them at deep support levels assuming no negative factors arise over the weekend and short term future horizon.
It should be noted that this pattern is playing out as right now but is at the 1.618BC=CD level(today's low); and more importantly, at the max target levels located in the 1.2770/80 region if today's low is breached.
Ideal positions should be established after the weekend at these levels where bulls and shorts will commit to long positions.
I will be establishing longs at fib target points between the 1.27XA level and 2.618BC level. Risk should be adjusted to compensate for the 100 pips spread between the levels with small trades being initiated, and larger trades being established at the lower levels.
Discipline and excellent money management will prove vital to ensure this trade succeeds or limits losses to an absolute minimal.