[B]EUR/USD breaks consolidation zone, GBP/USD bounces at 78.6% Fib[/B]
The EUR/USD finally made a bearish break of the larger consolidation zone yesterday, which confirms the wave X (purple) and this bearish wave count of the last few weeks. The breakout has large momentum which could indicate a bearish continuation, although a bounce or retracement at the 50% and psychological round level of 1.10 could occur.
The EUR/USD is expanding the 5th wave (orange) and price is now falling towards the Fibonacci targets of wave 5 (grey). A bullish bounce or retracement at 1.10 could indicate that a wave A (green) has been completed and a wave B (green) will start.
The GBP/USD was unable to post a lower low as expected in previous wave counts earlier this week. A triangle formation is the most likely structure at the moment as price builds a correction within wave 4 (green) after the huge decline last week in wave 3 (green).
The GBP/USD bounced at the 78.6% Fibonacci level and the bullish momentum after the bounce is indicating that new zigzag (orange) is taking place.
The USD/JPY broke above the resistance of the daily downtrend channel (dotted red) but price still needs to break above the horizontal resistance of wave 1 (purple) before a higher high is confirmed. Once the break occurs, a bullish impulse wave seems to be developing (purple) which is most likely wave 3 (purple).
The USD/JPY failed to break above the top (red) yesterday and instead is expanding the correction sideways, which is normal for a wave 4 (brown). A break above resistance (orange/red) could indicate the potential for the USD/JPY to continue with the uptrend (green arrows) as part of wave 3 (blue). A break of support (green) could indicate a larger wave 4 (brown) as long as price stays above the 50% Fibonacci of wave 4 vs 3.
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