Currency pair GBP/USD
The United Kingdom (UK) is set to trigger Article 50 today, which formally announces its exit out of the European Union (EU). There is a two year window for negotiations to take place and to sort out all of the details regarding the Brexit process.
The formal announcement of the British government triggering Article 50 is officially expected to happen at 1:30pm (11:30am GMT) in Brussels when the UK’s representative to the EU delivers a letter of notification to the European Council President Donald Tusk.
The GBP/USD failed to continue the bullish momentum above 1.26 and broke below the support trend line (dotted blue). Price could now be retracing back towards the Fibonacci levels of wave X vs W and could bounce at one of these supports levels. The wave WXY (blue) could complete a larger wave E (green) triangle.
The GBP/USD failed to break the previous top which has been labelled as a wave B (pink). The bearish breakout saw price complete 5 bearish waves (purple), which could complete wave C (pink) of wave W (orange). The Fibonacci levels of wave X vs W (orange) could now be potential resistance, which could build WXY (orange) waves within wave X (blue).
Currency pair EUR/USD
The EUR/USD did not manage to break above the resistance trend line (orange) and made a bearish turn which completed wave C (green) of wave Y (blue). A larger bullish correction within wave Y (brown) is possible if price stays above support (green/blue lines).
In the meantime the bearish price action on the EUR/USD could be seen as an ABC (green) or as a bearish 5 wave (red). A bearish bounce at the Fibonacci levels of wave 4 vs 3 could be part of wave 4 (red) but a break above the 61.8% Fib makes an ABC (green) more likely.
Currency pair USD/JPY
The USD/JPY indeed made a bullish bounce and broke above the resistance trend line (dotted orange). is probably building a larger bearish ABC zigzag (brown), which could take price down to the 50% Fibonacci retracement support level of wave 4 vs 3 (purple).
The USD/JPY has divergence between the bottom of wave 3 (purple) and wave 5 (purple) which could trigger a retracement such as an ABC (orange) zigzag. A break below the 100% Fibonacci of wave B vs A invalidates the ABC pattern.
