Elliott Wave Analysis: Ending Diagonal On USDCAD

By: Gregor Horvat | Tue, May 2, 2017
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We can see USDCAD undergoing a small intraday rally within sub-wave five of 5, which can be the last act of bulls, before a probable reversal towards lower levels happens. That said we see wave 5 displaying a structure of an ending diagonal, which usually suggests a sharp reversal to come, once the ending diagonal completes itself. Well, bears could take over around the Fibonacci ratio of 261.8 in hours to come.

USDCAD, 1H

USD/CAD 1-Hour Chart

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 Pattern:

 


Disclosure: We do not own any assets or share of the instrument mentioned in our outlook

 


 

Gregor Horvat

Author: Gregor Horvat

Gregor Horvat
www.ew-forecast.com

Gregor Horvat

Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of www.ew-forecast.com, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on: SafeHaven.com, FXstreet.com, Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu, Insidefutures.com, etc. He recently won the award on FXStreet.com for Best Forex Analysis in 2016. At www.ew-forecast.com he helps clients and educate them about the Elliott wave prinicple and how to label and track unfolding patterns in real time.  His approach to the markets is mainly technical. He uses a lot of different methods when analyzing the markets such as candlestick patterns, MA, technical indicators etc. His specialty however is Elliott Wave Theory which could be very helpful especially if you know how to use it in combination with other tools/indicators.

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