EURUSD bear flag promises vivid trading day 2016.05.17

EUR/USD

4 hour

The EUR/USD broke below the long-term support trend line (green), which could be explained via a continuation of wave C (blue) or alternatively a wave 3 if price expands below the 161.8% Fibonacci target.

1 hour

The EUR/USD is building a bear flag chart pattern (purple).A break below the flag could see price head towards the Fibonacci targets. A break above resistance could see price invalidate wave 4 (orange).

GBP/USD

4 hour

The GBP/USD rally has shown strong bullish momentum, which makes it unlikely that price is in a bearish wave C (pink). The wave B (pink) has therefore been put back on the chart and the Fibonacci levels are potential resistance levels.

1 hour

The GBP/USD was unable to break below the 127.2% Fibonacci level of X vs W. The break above resistance (orange dotted) trend line has seen price rally quickly. Now price is near resistance again and the Fibonacci levels are areas where price could struggle or turn.

USD/JPY

4 hour

A potential USD/JPY break above the 161.8% Fibonacci target favors a wave 3 (purple) whereas a bearish break below the support trend line (blue) makes a wave C (pink) more likely.

1 hour

The USD/JPY is moving sideways between support (blue) and resistance (orange). The indecision zone is marked by these trend lines and has become quite large in the meantime. A breakout with a strong 4 hour candle close is therefore preferred to avoid false breakouts. This means a bearish candle with a close near the low and a bullish candle with a close near the high.