EURUSD, GBPUSD opposite patterns: bull flag vs. bearish zigzag 2016.04.01

EUR/USD

4 hour

The EUR/USD showed more bullish momentum yesterday and has reached the 50% Fibonacci target. A bigger resistance zone could be at 1.15 where a 61.8% Fibonacci target and resistance trend lines are aligned.

1 hour

The EUR/USD completed a shallow ABC bearish zigzag (green) within wave B (blue) after which price turned around to start the wave C (blue) continuation. For the moment it seems likely that price is in a bull flag (purple lines) chart pattern as part of a wave 4 (green). This is a major difference with the GBPUSD because price is making a bearish zigzag which is contrary to the EUR/USD' bull flag.

GBP/USD

4 hour

The GBP/USD has bounced at the 38.2% Fibonacci level of wave B (pink) but the rally was not able to break above the resistance trend line (orange) and price is expanding the bearish correction.

1 hour

The GBP/USD broke above below the support (dotted green) trend line, which makes it likely that a wave C (green) has started. A bearish ABC zigzag (green) could be underway now within potential wave B (pink). The wave B is vulnerable to change if price were to gain strong bearish momentum followed by a sideways correction.

USD/JPY

4 hour

The USD/JPY continues with building a smaller contracting triangle below the broken bullish channel (dotted green). A bearish break could see price fall down to retest the double bottom (green).

1 hour

The USD/JPY has been testing the support and resistance lines of the contracting triangle. A bullish break of the triangle could see price retest higher Fibonacci levels or even the trend line (orange). A break above the top at wave B (blue) would however invalidate the bearish wave C (blue). A bearish break could see price fall down to retest the Fibonacci levels.