Daily Wave Analysis for October 8, 2013 2013.10.10
EURUSD
The EURUSD has fullfilled its requirement of breaking the FOMC top at 1.3570 and now has divergence on many time frames. The break of the top was choppy which is a typical characteristic for a 5th wave structure. Is the 5th wave finished or will the EURUSD make one more push up?
Currently price is at bottom of uptrend channel, although price is passively pushing through it sideways. A break of the channel would be a first indication, but of crucial importance is also the bottom of wave 2 of wave 5 at 1.35. A break of that confirms the completition of the 5th wave.
4 hour chart EURUSD:
A bounce up to correct the 5 wave downside is still in play, as mentioned yesterday. In fact, the EURUSD stopped at the 500 Fib at 1.3592 and reverted back down. The correction could expand & become more complex. The currency pair has the potential of retracing to the next Fibonacci retracement level which is the 61.8% at 1.3605.
30 min chart EURUSD:
GBPUSD
Cable broke out of the uptrend channel is now retracing back towards the wave 4 of one lesser degree and the 38.2% retracement Fib of the entire 5 wave up sequence (green letters) at 1.5950.
4 hour chart GBPUSD:
GBPUSD stopped at the 38.2% Fibonacci retracement as mentioned yesterday. There is a decent chance of a fall to below 1.60 to complete 5 waves down and then get ABC correction up. A push up to the 50% at 1.6133 before the fall is the 2nd scenario.
30 min chart GBPUSD:
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USDJPY
The main question still remains whether the USDJPY will complete a wave E contracting triangle in a potential wave 4 and bounce in this area for a weekly wave 5 continuation. The key level is 95.80. A break below invalidates the triangle (and increases the odds of a move down to 90-91). The downside correction can take long to play out, but the UJ does seem to be making a falling wedge pattern.
4 hour chart USDJPY:
Could the downside correction be over? A break above the falling wedge and the 4 hour top at 97.50 would be a confirmation of that scenario.
60 min chart USDJPY:
