GBP/USD Bounces 400 Pips from 1.20 Support Zone

GBP/USD

4 hour

The GBP/USD was unable to break the major support level (green) from 2016 and the 1.20 round level support. During the speech of British Prime Minister May regarding the Brexit out of the EU, the GBP/USD rallied strong and bounced +/- 400 pips. Price broke above the resistance (dotted red) of the downtrend channel. The bullish price action could complete the entire downtrend potentially (which would make the waves 5 a truncated wave 5 by not breaking the bottom). But for the moment, the current price action is still considered a bullish correction and the waves 5 (green/light blue/purple) have been left open.

1 hour

The GBP/USD strong momentum could hint at a larger ABC zigzag (blue) but the price spike itself could be seen as a zigzag too. It will be important to see what kind of patterns are built later today, for instance whether bearish momentum is shown or whether price builds a triangle.

EUR/USD

4 hour

The EUR/USD is moving higher within the anticipated bullish ABC (green) zigzag. The next major Fibonacci level is the 78.6% Fib of wave 2 (brown), which is invalidated if price breaks above the 100% Fibonacci level of wave 2 vs 1.

1 hour

The EUR/USD broke above another resistance trend line (dotted red) and price is heading towards the Fibonacci targets of wave C (green). The momentum is most likely a wave 3 (orange) and the current correction could be a shallow wave 4 (orange) correction, which typically stops and turns at a 23.6% or 38.2% Fib.

USD/JPY

4 hour

The USD/JPY is in a mild downtrend channel (red/green), which is retracing back to the 38.2% Fibonacci level of wave 4 (purple).

1 hour

The USD/JPY broke below support (dotted green) and is most likely building an ABC zigzag (brown) pattern. The current wave 4 (orange) is invalidated if price breaks above the 61.8% Fibonacci retracement level.

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