Currency pair EUR/USD
The EUR/USD failed to immediately continue with the bullish breakout yesterday and is building an expanded wave 4 (green) correction via a WXY (purple) pattern. A next breakout above the resistance trend line (red) of the contracting triangle pattern could see the continuation of wave 3 (blue).
The EUR/USD is building a smaller triangle pattern which are indicated by the support (green) and resistance (orange) trend lines. A break below support could see price challenge the bigger support zone (blue) and perhaps even the 23.6% Fib of wave 4 vs 3. A break above resistance could see price test the bigger resistance line (red). There is the possibility of an ABC (brown) correction before wave 4 (green) is ready but a break above the major resistance (red) would invalidate that and indicate a potential bullish breakout.
Currency pair USD/JPY
The USD/JPY made a bullish rally away from the key support zone (green lines) but bearish price action is now challenging the support trend line (blue). A bounce could see price move higher towards the Fib levels of wave B vs A whereas a bearish break could indicate a retest of the support zone.
The USD/JPY is testing the intermediate support levels (blue lines). Price is either building a 123 (purple) or completed an ABC (blue), which will depend on how price responds to the support trend lines.
Currency pair GBP/USD
The GBP/USD made a new lower low but was unable to break below the support trend line (blue). The downtrend channel (red) is still valid for this Cable pair and price could test the Fib levels.
The GBP/USD bearish breakout (dotted green) is most likely a wave 3 (green). The wave 4 (green) is valid as long as price stays below the 61.8% Fib at 1.2872.
