USD/JPY's Bullish 250 Pip Bounce within Downtrend Channel

USD/JPY

4 hour

The USD/JPY failed to break below the support trend line (green) of the downtrend channel (red/green) and instead price broke above an internal resistance trend line (dotted orange). The USD/JPY might have completed the wave 4 (purple) correction but a break above the channel is needed as a confirmation. The resistance (red) of the channel is a critical break or bounce zone for the direction of the trend.

1 hour

The USD/JPY has either built an ABC or a 123 (brown). The latter is most likely if price bounces at the support trend line (blue) and Fibonacci levels of wave 4 vs 3.

EUR/USD

4 hour

The EUR/USD is building a bullish channel (orange/blue lines) within a bullish ABC (green) zigzag. The next major Fibonacci level is the 78.6% Fib of wave 2 (brown), which is invalidated if price breaks above the 100% Fibonacci level of wave 2 vs 1.

1 hour

The EUR/USD failed to break above the resistance trend line (red) and in fact broke below the support trend line (dotted green). The retracement however could still be part of a wave 4 (orange) correction. Although a deep retracement for a wave 4 (orange) is unusual, the invalidation level of this wave structure occurs if price breaks below the 78.6% Fib.

GBP/USD

4 hour

The GBP/USD strong momentum after failing to break the 1.20 round level has been labelled as a wave A (blue). So far price has been moving lower in a choppy manner, which could confirm a wave B (blue). The Fibonacci levels of wave B vs A could therefore act as support levels.

1 hour

The GBP/USD respected the 38.2% Fibonacci level of wave B vs A but a break above resistance (red) is needed before there is a higher chance that wave B (blue) has been completed. A break below the 38.2% Fib suggests that price could retrace to lower Fib levels.

Follow @ChrisSvorcik on twitter for latest market updates