Major Currency Pairs Initiate ABC Zigzag Corrections 2016.01.13
EUR/USD
4 hour
The EUR/USD remains in a narrow price range since the beginning of December. A bearish breakout below support (green) could see an expansion of wave X (brown) whereas a bullish breakout above resistance (orange) could see a continuation of wave C (purple).
1 hour
The EUR/USD continued its bearish retracement yesterday without breaking the bottom of wave B (purple). A break below that bottom (green) invalidates the current wave 1-2 (blue) whereas a break above resistance (yellow) could see price head to the Fibonacci targets of wave 3 (blue).
GBP/USD
4 hour
The GBP/USD broke the bottom of the downtrend channel and made yet another lower low. Price has however reached the 61.8% Fibonacci target which could cause a retracement.
1 hour
The GBP/USD seems to have completed multiple 5th waves with the recent lower low. However, in a strong trend price can build extensions that are push the trend further, so an alternative wave count could be a wave 1-2 (orange) for instance. For the moment an ABC correction (blue) seems to be the path of least resistance.
USD/JPY
4 hour
The USD/JPY broke above the resistance trend line (dotted red) after building 5 waves and approaching new support levels (blue) from a daily chart. This could cause price to make a bullish bounce, which seems best explained by a potential wave WXY (green) formation.
1 hour
The USD/JPY seems to have completed the AB part of a larger bullish ABC zigzag (brown).