Extended Euro Crosses Due for a Correction

[DailyFx]

1. EURJPY
2. EURCHF
3. EURGBP

EURJPY - The EURJPY has continued higher following the bounce from channel support last Tuesday. The short term structure is bullish as long as price remains above the 4/20 high of 161.92. Support there is reinforced by 2 month trendline support. Daily oscillators warn of a correction as RSI has been in overbought territory since Thursday and is divergent with former peaks. The next level of potential resistance is at the 161.8% extension of 152.66-158.00 / 155.34 at 163.98.


EURCHF - The EURCHF has chopped higher from 1.6320 in what may be an ending diagonal in the 5th wave position of the 5 wave rally from 1.5930. These patterns lead to reversals and the high on Friday creates bearish divergence with RSI (daily). Coming under short term trendline support from 1.6320 is the first sign that a top is in place. A measured objective, where wave 5 (starting at 1.6320) would equal wave 1 (1.5930-1.6192) is at 1.6582.


EURGBP - The next leg up in EURGBP may be underway as the rally from .6754 has impulsive characteristics. Remaining above .6804 keeps us looking higher. A decline below .6804 would change the count and label the rally from .6748 as wave B rather than wave 1 of 3. In this instance, we would be looking for a C wave decline to come under .6748. Given the one sided sentiment regarding the euro, we tend to favor the latter scenario that calls for the a decline to come under .6748.