Elliott Wave Analysis: EURUSD Trading In Final Stages Of A Corrective Retracement

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On the 4h chart of EURUSD we are observing a three wave move developing in wave 4), with price now  trading in sub-wave C. As we can see on the updated count, wave C could be an ending diagonal, a powerful reversal pattern that can cause a sharp reversal lower into wave 5). Decline below wave four swing support and then towards 1.0341 level would suggest that pair is underway to new lows with wave 5).

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:

 

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EURUSD, 4H

 

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Gregor Horvat first made his name in Slovenia and has become world famous in the forex market since 2003. He is both a trader and a technical analyst who offers trading strategies on the Fibonacci and Elliot Wave principle. His main focus is on currency pairs, U.S. stock market, gold and oil. Gregor Horvat found the forex service offered on http://www.ew-forecast.com/. This website provides traders technical analysis, while putting emphasis on behavioral patterns. These are derived from the Elliott Wave Principle (EWP). Traders who are interested in the entry and exit positions, and he probability of the former and latter follow the EWP on a regular basis.