Currency pair EUR/USD
The EUR/USD continued with the uptrend as expected in yesterday’s analysis. The bullish breakout above the resistance trend line (dotted red) saw price move towards the 61.8% Fibonacci target. Price could potentially extend the bullish momentum towards the 1.1925 and even 1.20 when considering the strong bullish breakout candle on the 4 hour chart.
The EUR/USD is most likely building a wave 3 (grey) momentum which might not yet be completed. A bullish continuation could see price move towards the 161.8% Fibonacci target of wave 3 vs 1 for instance. Once wave 3 is completed, then a wave 4 (grey) retracement is expected to take place.
Currency pair USD/JPY
The USD/JPY downtrend indeed reached the 110 target as mentioned in yesterday’s analysis. The round level could act as support and cause a retracement or even a potential reversal. Eventually a larger support trend line (blue) could be the end target of the bearish wave 5 (orange) at 109.50.
The USD/JPY indeed completed a wave 4 (grey) retracement and continued lower within wave 5 (grey). The slower bearish momentum is causing a falling wedge chart pattern (orange/blue), which could lead to a bullish retracement. The pullback could be part of a wave 4 (purple) within the 5th wave (orange).
Currency pair GBP/USD
The GBP/USD broke the rising wedge chart pattern to the upside. The bullish break above resistance (dotted lines) indicates a continuation of the wave 5 (purple). Whether the wave 3 (blue) will indeed be confirmed depends on how far the GBP/USD will move. A failure to break above the 100% Fibonacci target could indicate an ABC rather than a 123.
The GBP/USD could be building an extension of the wave 3 (green) with 5 internal waves (orange/purple). A pullback could be part of the wave 4 (purple) which means that the Fibonacci levels of wave 4 vs 3 could act as support.
