EUR/USD, GBP/USD corrective channels control price action landscape 2016.07.04

EUR/USD

4 hour

The EUR/USD is expanding the wave 2 (green) correction via a WXY (brown). A bearish breakout could lead to a continuation of the bearish momentum (wave 1 green) and could therefore be the start of a wave 3 (green).

1 hour

The EUR/USD is building a bear flag chart pattern (orange/green lines). The Fibonacci levels of wave '2 vs 1' should act as resistance but a break above the 100% level invalidates the current wave structure.

GBP/USD

4 hour

The GBP/USD is building a consolidation at the 100% Fibonacci target of wave 'C vs A'. A break below the support trend line (green) could see price continue with its bearish momentum towards the next 127.2% Fibonacci target.

1 hour

A GBP/USD is showing lack of bullish initiative so far as price action moves sideways in a bear flag chart pattern (green/red lines). For the moment a wave 1-2 (green/pink) explains the wave structure the best unless price breaks above the red trend line, which would most likely indicate an expansion of the wave 4 (blue).

USD/JPY

4 hour

The USD/JPY is behaving correctively as it moves away from the bottom of the downtrend channel. This makes a wave B (green) the most likely scenario at the moment. Price would need to break above the 100% Fib level before waves Y (blue/brown) can be considered completed.

1 hour

The USD/JPY is building a channel (red/green lines). A break above the pattern should see price stop at the Fibonacci retracement levels whereas a break below the support (green) should spark the breakout if the bears can keep control with good candle closes near the low.

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