UK Snap Election Sparks Bullish Breakout above Triangle Pattern
GBP/USD
4 hour
The UK Prime Minister Theresa May has announced her goal to organise new elections ahead of the Brexit negotiation process between Great Britain and the European Union. The snap general election call would take place on June 8, 2017 but needs approval by a majority of Member of Parliament in the House of Commons. The vote will be held today on Wednesday 19 April 2017.
The election news caused the GBP/USD to break several tough and long resistance zones. The bullish move broke the contracting triangle chart pattern formation from the daily chart. The wave 4 (green) pattern could still be valid because the wave 1 (from the daily chart) has not yet been reached but a movement towards or above the 78.6% Fib makes a wave 4 (green) invalid.
1 hour
The GBP/USD breakout could be a wave 3 (purple) momentum and the current pullback is a potential wave 4 (purple) pullback. Such a retracement often bounces at the 38.2% Fibonacci level for a wave 5 continuation within wave C (orange).
EUR/USD
4 hour
The EUR/USD broke above the resistance trend line (dotted red) and expanded the wave 2 (brown) correction as indicated in yesterday's wave analysis. Price has now reached the 50% Fibonacci retracement level which could cause a bearish bounce – see the 1 hour chart.
1 hour
The EUR/USD indeed developed an ABC (purple) zigzag but price could be expanding the wave C (purple) part with 5 internal waves (pink). The current potential wave 4 (pink) remains valid as long as price stays above the 50% Fibonacci retracement level. A potential 5th wave after completing wave 4 (pink) could see price challenge the 61.8% Fib of wave 2 (brown).
USD/JPY
4 hour
The USD/JPY is building a potential wave 4 correction (orange), which would become invalid if price retraced above the bottom of wave 1 (red line). A break below the support level (blue) could indicate a bearish breakout and completion of wave 4 (orange).
1 hour
The USD/JPY could be building an ABC (purple) zigzag correction towards the Fibonacci levels of wave 4 (orange). A break below the Fibonacci levels of wave B (purple) would invalidate the wave count. A break above the resistance level (red) could spark a wave C (purple).
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