Euro Crosses Remain In Corrective Patterns

[DailyFx]

1. EURJPY
2. EURCHF
3. EURGBP

EURJPY - The EURJPY has consolidated sideways in a small degree 4th wave. Some more sideways action may take place before the EURJPY touches the 2 month supporting trendline and vaults higher. Ultimately, we expect the EURJPY to challenge the upper end of the channel near 167.00, although a rally above 163.59 would satisfy minimum expectations for a small 5th wave. The lower channel line needs to hold on a daily basis in order to keep the bullish outlook the preferred one. A sharp reversal could occur following a rally above 163.59 as daily RSI has been above 70 since 4/26. Weekly RSI is overbought and shows bearish divergence also so longs should keep risk tight.


EURCHF - The EURCHF has held above the 4/20 high (1.6436), which keeps the bullish outlook intact. With 1.6436 intact, it is possible that the pair will rally to a new high (above 1.6533) in a 5th wave. Declining below 1.6436 and closing below the 2 month support line (daily basis) argues for a deeper correction to 1.6320 (at least). Daily oscillators are bearish with the recent MACD bearish cross and RSI declining from above 70.


EURGBP - The EURGBP rally from .6748 looks like a B wave, which means that a C wave decline will occur before the next rally leg. If .6842 remains intact, then we are looking for the C wave to challenge the 100% extension of .6867-.6748/.6842 at .6723. Rallying above .6842 would limit confidence in the C wave scenario but not eliminate it. ATR is extremely low, at 25, which is indicative of a correction.