EUR/USD, GBP/USD build bullish ABC rally within wave-2 2016.07.21

EUR/USD

4 hour

The EUR/USD seems to have completed 5 bearish waves (purple), which have been marked as a wave 1 (purple). A wave 2 (purple) is expected and price can retest the Fibonacci levels of '2 vs 1'. A break above the 100% level invalidates the current wave count. Typically waves 2 retrace deep towards the 61.8% or 78.6% Fib.

1 hour

The EUR/USD indeed was close to completing wave 5 of 5 (green/blue) as mentioned in yesterday's wave analysis. A bullish ABC zigzag (blue) seems to be unfolding within wave 2 (purple). A break of the wave 1 (purple) bottom could indicate a lack of a wave 2 retracement whereas a break of the resistance trend line (red) could spark the wave 2 (purple) correction.

GBP/USD

4 hour

The GBP/USD broke one support trend line (dotted green) but is showing a new bullish bounce again which creates a new support trend line (green). Price is either in a bearish 123 (pink) or in a bigger ABC retracement (purple).

1 hour

The GBP/USD indeed started the wave 2 (green) retracement, which was mentioned in yesterday's wave analysis and live webinar. The bullish rebound saw GBP/USD develop via an ABC zigzag (blue) and channel (green lines). The wave 2 (green) is invalidated if price breaks above the 100% Fib level of '2 vs 1'. Here too waves 2 tend to test deeper Fib levels like 61.8% and 78.6%.

USD/JPY

4 hour

The USD/JPY broke the top of wave A (grey) which makes it most likely that price has completed the correction and is building a new bullish impulse. A break above the 161.8% Fibonacci level could change the wave structure to bullish and see price head to higher Fib targets.

1 hour

The USD/JPY broke resistance (dotted red) and a new bullish impulse seems best explained by a wave 3 (purple). Any wave 4 retracement once the wave 3 is completed should typically stop at the 38.2% Fibonacci retracement level.

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