The markets have the potential to be fairly volatile over the next 24 hours. Friday is sort of a trifecta because it marks the end of the week, month, and quarter. You can be sure traders will be squaring up positions heading into Q4.

Earlier today we looked at dollar weakness on the index chart and tonight I'm looking at more evidence that suggests we might see a lower dollar in the near term. Taking a big step back, we're going to apply Fibonacci analysis not to price, but to time. Comparing the two significant highs illustrated in orange, we get a total bar count of 177. If you multiply our Fibonacci ratios to this bar count, you arrive at the 1.382 Fib ratio which absolutely nailed the market's turning point on Sept 24 at 1.2289. Projecting out further to the 1.618 ratio, the turning point is predicted to be today. Looking below the chart, that the same significant high on September 17 compared to the September 24 low yields a 68 bar count. Multiplying that bar count by 1.618 also calls for today to be a significant turning point. With these two 1.618 Fib time projections and the standard .618 Fib price retracement at 1.2494, on the last day of week, month, and quarter, we're likely to see some fireworks tonight.

Let's move down to the 5-minute chart to identify some entry levels. The .786 retracement and 1.272 extension will serve as our entry levels, which you'll notice surround .618 retracement from the 120-minute chart above. Stops should be just above the 1.618 Fib extension and initial take profit is a test of 1.2420 support.

Todd Gordon is a Technical Currency Strategist and Fund Trader with GAIN Capital Group.

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The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.