Break of Channels Spark ABC Formations in Forex 2015.07.22

EUR/USD

4 hour

The EUR/USD made a bullish recovery rally at the major support level (green).

1 hour

The EUR/USD broke the resistance line (orange) and made a rally which could be explained by a wave 1 or a wave A (both scenarios are plotted on the chart). A wave C would typically go to the 100% Fibonacci target whereas a wave 3 extends to the 161.8% and higher.

GBP/USD

4 hour

The GBP/USD is slowly correcting in what is probably a wave X (green) after which a rally for wave Ys is expected. The wave X retracement could use any of the Fibs but for now is respecting the 38.2%.

1 hour

The GBP/USD is building a wedge with clear support and resistance lines.

USD/JPY

4 hour

The USD/JPY has completed wave A (brown) and is probably making a bearish correction for wave B.

1 hour

The USD/JPY broke below the channel and is showing signs of bearish momentum (bigger downside candles) which could be part of a ABC zigzag within wave B (brown).