USDCHF Could Turn Bullish In The Next 24 Hours
USDCHF looks interesting here; we see an overlapping price action contained by contracting trendlines that looks like an ending diagonal in wave C) position. As you know, in ending diagonals wave 3 must not be the shortest, so wave 5 should not go beyond 0.9045 because wave 3 is already shorter than wave 1. Generally speaking, the price action is very slow and choppy, which is very common in late stages of any trend, so we think that sooner or later USD will turn bullish.
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
Written by www.ew-forecast.com