Mon, May 29, 2023 @ 01:16 GMT
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EUR/USD Bullish Target After Failure To Break 1.05 Support

Currency pair EUR/USD

The EUR/USD indeed made a bullish bounce yesterday at the support Fibonacci levels of wave X (blue). Price could now be building a complex WXY correction within a larger wave 2 (purple) unless price breaks below the 138.2% Fib level (invalidation). The Fibonacci levels of wave 2 (purple) could also act as reversal spot and remains valid unless price breaks above the 100% level of wave 2 vs 1 (purple).

The EUR/USD could be building a bullish ABC (green) within wave Y (blue) but a break below the 100% Fibonacci level of wave B vs A invalidates the structure.

Currency pair GBP/USD

The GBP/USD retraced back the support level (blue line) of the contracting triangle chart pattern after breaking above it (orange dotted). A bullish bounce could see price potentially retest the larger resistance trend line (brown) as part of wave C (blue).

The GBP/USD indeed made a bearish retracement yesterday which bounced at the 78.6% Fibonacci level of wave 2 (purple). A bullish continuation above resistance (red) could see price pick up more momentum towards the Fibonacci targets of wave C (orange). A break below the 100% level of wave 2 vs 1 invalidates the wave structure.

Currency pair USD/JPY

The USD/JPY is probably in a wave 1-2 (blue) unless there is a break below the 100% level of wave 2 vs 1. A larger ABC (brown) seems to be taking place within wave 2 (blue). A wave 2 (blue) correction typically last between 100% and 161.8% of wave 1 (see bottom scale).

The USD/JPY could be completing a bearish ABC (brown) zigzag within wave 2 (blue). There could be another ABC zigzag (orange) within wave that wave B (brown) but the wave B could also have already been completed and a break above the red line invalidates wave B (brown). A break below support (green) could price test but probably not break the next support (blue) which would probably complete the ABC (brown) within wave 2 (blue).

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