EURUSD, USDJPY finally display flavours of momentum 2016.05.02

EUR/USD

4 hour

The EUR/USD has indeed showed a continuation of the uptrend within the waves Y as indicated last week. Price is now reached a heavy resistance zone (red). A break above it could see price continue towards the Fibonacci targets.

1 hour

The EUR/USD broke above the resistance trend line (dotted orange) and made a strong bullish impulse which seems best explained by a wave 3 (grey). Price could retrace for a wave 4 (grey) but must not retrace deeper than the 61.8% Fibonacci level otherwise the wave count is invalidated.

GBP/USD

4 hour

The GBP/USD remains in an uptrend as long as price stays above the support trend line (green). Price is showing signs of struggle now at the horizontal resistance (red).

1 hour

The GBP/USD is showing choppy price action since the break of the inner resistance line (dotted orange), which can be explained by an ending diagonal (purple 5 wave). Whether wave 5 has been completed remains to be seen and price could push higher if it stays above the support trend line (green). A bearish break could lead to a bearish ABC (orange) or 123.

USD/JPY

4 hour

The USD/JPY has reached a large 38.2% Fibonacci retracement level of wave B (sea green), which could initiate a bullish rally or a correction.

1 hour

The USD/JPY could extend the 5th wave with an extension due to strong bearish momentum and lack of divergence via a wave 4 and 5 (orange). A break above the 61.8% of wave 4 makes the current wave count unlikely.