EUR/USD and USD/JPY in contracting wedge chart patterns 2016.02.18

EUR/USD

4 hour

The EUR/USD retraced back to the 38.2% Fibonacci level, which caused price to pause. A break down could see price fall deeper towards the 50% and 61.8% Fibonacci levels. A break up could price retest the resistance levels. A break below the support trend line (green) confirms the completion of wave 4 (blue) whereas a bounce at or above support (green) indicates that the wave 4 is not yet finished.

1 hour

Price remains in the sideways channel. A break of one of the trend lines could suggest whether price is expanding the wave X (purple) lower or whether price is bouncing at the Fib.

GBP/USD

4 hour

The GBP/USD respected the 78.6% Fibonacci level. Depending on how far price bounces, the bearish move could have completed a WXY wave correction (pink) within wave X (blue). A break below the bottom (green) invalidates this wave structure.

1 hour

The GBP/USD completed a bearish ABC (blue) and seems to be building a bullish ABC (blue).

USD/JPY

4 hour

The USD/JPY is respecting the resistance zone but price has not managed to move away from it. A break below the support (green) trend line is needed before price can move towards challenging the wave W (blue) bottom.

1 hour

The USD/JPY is in a contracting triangle chart pattern.