Currency pair USD/JPY
The USD/JPY failed yesterday to break the top resistance (red). Price is now building a potential pullback within wave 4 (orange) which could find support (green) at the previous bottom and tops. The retracement is starting to resemble a bull flag chart pattern, which could offer a bullish continuation signal upon a bullish breakout.
The potential USD/JPY retracement within wave 4 (orange) could also receive support from the Fibonacci levels of wave 4 vs 3. A bullish break could price start wave 5 (orange) whereas a break below the 61.8% Fib makes a wave 4 (orange) unlikely.
Currency pair EUR/USD
The EUR/USD is retracing back up after breaking below the long-term support trend line (dotted blue). Price will need to break below the bottom at 1.11 before a potential wave 3 becomes likely. At this point a break, pullback and continuation seems the most probable scenario, which is why a wave 1 and 2 (brown) is indicated on the chart.
The EUR/USD is showing divergence between the bottoms which could cause a wave 2 (brown) retracement via an ABC zigzag (blue). Price invalidates wave 2 (brown) if price manages to break above the 100% Fibonacci level. A break below support (green) could indicate a continuation of the bearish trend.
Currency pair GBP/USD
The GBP/USD bearish breakout below support (dotted blue) has not gained much bearish momentum as yet. A continuation below 1.26 is needed before further bearish extension towards the Fib targets of wave 3 (blue) is possible.
The GBP/USD completed a wave 4 and 5 (grey) yesterday and is now in a new potential wave 4 (orange). This wave is invalidated if price manages to break above the bottom of wave 1 (orange), which is indicated by the resistance trend line (red). A break below support (green) could see the continuation of wave 3 (blue).
