Breakout direction to decide wave structure in Forex 2016.08.12

EUR/USD

4 hour

The EUR/USD bounced at the deep Fibonacci retracement level of 78.6% within a wave 2 (purple). A break above the 100% level invalidates wave 2 (purple) and indicates a large and complex correction. In that case the wave count will be changed to reflect the corrective zone. A break below support could still confirm the potential waves 3 (purple/brown) but sufficient momentum must be visible in the breakouts.

1 hour

The EUR/USD has clear resistance (red/Fib) and support levels above and below price. A bearish break could start the impulsive waves (purple/blue) whereas a bullish breakout would indicate an ABC correction (purple).

GBP/USD

4 hour

The GBP/USD is either completing a wave 5 (blue) or extending the wave 5 (blue) with a wave 1-2 (pink).

1 hour

The GBP/USD seems to have completed an ABC correction (blue) at the previous bottom, which has been labelled a wave X (green). A break below the support (green) and Fibonacci levels of wave X vs W invalidate the current wave count and indicate a downtrend continuation. A break above resistance (red) would most likely confirm a bullish rally for wave C (blue).

USD/JPY

4 hour

The USD/JPY indeed bounced at the support tend line (green). A bullish break above resistance (oranges) would confirm potential for a wave 3 rally (green).

1 hour

The USD/JPY has completed deep wave 2 pullbacks and might be starting with bullish momentum. A strong resistance level (red) however is nearby and a breakout is needed before the wave rally can develop.

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