EUR/USD Completes Bullish Wave 5 and Starts Bearish Wave 1 2015.10.16

EUR/USD

4 hour

The EUR/USD seems to have completed a bullish 5 wave (green), which in turn could have completed the larger wave 2 (green) or wave B (green). Price has reached an interesting point where it will either continue with the bullish correction up to the 78.6% Fibonacci retracement level or start a new bearish impulse as marked on the current chart with a wave 1-2 (orange).

1 hour

The EUR/USD broke the support trend line (dotted green) which thereby completed the bullish 5 wave structure (green) and wave C (blue). Price could now be starting a new bearish impulse when analyzing the 5 waves down (pink). A break of the 100% Fib level invalidates the bearish count and indicates the potential for price to move up to the 78.6% Fib on the 4 hour chart.

GBP/USD

4 hour

The GBP/USD has been struggling around the resistance trend line (red). Another layer of resistance is slightly higher at the 78.6% and 88.6% Fibonacci retracement levels. A move up towards that level could complete the expected ABC formation (green). A break above the 100% level invalidates the wave 1-2 (orange). A break below the support trend line (green) is needed before a wave 3 or C (green) becomes more likely.

1 hour

The GBP/USD is using the support from the wave 4 Fibonacci levels. A break below the 50% Fibonacci level indicates that the wave 5 (blue) and wave C (green) have completed at the most recent top. At the moment there is a decent chance that price will push higher within the wave 5 (blue) to the 78.6/88.6% region of the 4 hour chart.

USD/JPY

4 hour

The USD/JPY managed to break below the support (blue) of the sideways zone but quickly reverted back into the area. Whether price has sufficient steam to make a sustainable bearish breakout remains to be seen. It will be interesting to see how price reacts when it retraces back to the mean: will there be a bounce for more downside or will price relapse into a consolidation?

1 hour

The USD/JPY pushed once more lower as part of the wave 5 (pink). Now price is showing an impulsive bullishness which could be explained via an ABC zigzag (orange). The potential wave 4 (blue) is invalidated when price crosses into the wave 1 price territory (green line). In that case a wave 1-2 structure instead of 3-4 is likely.