US Dollar strength fades after divergence pattern appears 2016.09.22

EUR/USD

4 hour

The EUR/USD bounced at the previous bottom (green) during yesterday's trading. The bullish bounce has probably completed a bearish ABC (green). The resistance (red) and support (green) trend lines indicate a potential descending wedge chart pattern, which is confirmed if price breaks below support. For the moment a wave X (blue) within a larger wave d (green) triangle is likely.

1 hour

The EUR/USD completed a wave 5 (orange) after divergence appeared (purple) and will most likely build a bullish ABC zigzag (green) within wave X (blue). The Fibonacci levels of wave B (blue) vs A are expected to act as support with a break below the 100% level indicating an invalidation.

GBP/USD

4 hour

The GBP/USD has completed a bearish wave at the recent bottom, which could either completed a wave 3 (green) or wave C (purple) of a larger ABCDE contracting triangle (purple). A break above the 50% Fibonacci level of wave 4 (green) vs 3 and resistance trend line (red) invalidates wave 4 (green) and increases the chances of a wave d and e (purple).

1 hour

The GBP/USD is making a bullish wave and arriving at a key resistance zone (as indicated in the 4 hour chart) after wave 5 (blue) showed divergence (purple line) with wave 3 (blue).

USD/JPY

4 hour

The USD/JPY continued with its bearish correction and has now reached the 78.6% Fibonacci level. A break below the 100% Fib level of wave 2 (purple) vs 1 invalidates the bullish wave 1-2 (purple) and indicates a continuation of the downtrend (red).

1 hour

The USD/JPY is showing a potential bearish ABC (brown) correction unless price manages to break below support.

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