E Ending Diagonal On USD/CAD Suggests A Reversal!

USD/CAD is unfolding a bearish impulse, down from 1.371 level, which can be in final stages. We specifically see an Elliott wave ending diagonal underway within a blue wave v of 5 that is part of a bigger, bearish impulse, and which can look for a low, support, and a bounce at the 1.313/1.309 level. A later sharp recovery, and break above the upper Elliott wave ending diagonal line, and above the upper Elliott wave channel line will suggest a low in place, and a bullish turn in minimum, three waves underway.

USD/CAD, 4h

An ending diagonal is a special type of pattern that occurs at times when the preceding move has gone too far too fast, as Elliott put it. A very small percentage of ending diagonals appear in the C wave position of A-B-C formations. In double or triple threes, they appear only as the final “C” wave. In all cases, they are found at the termination points of larger patterns, indicating exhaustion of the larger movement.

  • structure is 3-3-3-3-3
  • a wedge shape within two converging lines
  • wave 4 must trade into a territory of a wave 1
  • appears primarily in the fifth wave position, in the C wave position of A-B-C and in double or triple threes as the final “C” wave

 

Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All of our work is for educational purposes only.

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