Elliott Wave Analysis: USDCHF Searching For A Base; A Reversal May Be Near
USDCHF was in a strong uptrend in the last few months of 2016, so recent sideways price move since mid-December is just another correction or pause within uptrend. We see it as wave 4) that seems to be unfolding as a complex correction, with sub-wave C showing qualities of an ending diagonal. As we can see on the updated chart, current bearish intraday movement suggests price trading in final parts of blue wave v of C, that will ideally find some support and make a new turn higher around the lower line of an ending diagonal.
A five wave move to the upside towards 1.0249 level would indicate that bulls are in control.
The ending diagonal is a special type of motive wave that occurs primarily in the wave 5 position when price has moved too far and too fast. Some ending diagonal triangles appear in the C wave of an ABC correction. In all cases, the ending diagonal terminates the move of larger patterns. They consist out of five waves, with each having three more sub-waves.
Basic Ending Diagonal: