On the 4h chart of GBPUSD we are observing the final stages of an ending diagonal where another leg up is still missing. We expected another push up into wave C) of 5) towards 1.3100-1.3150 zone, where the market can be looking for a top this week. So, for now the pair remains in bullish mode, therefore the current wave B) may find a base near 1.2790/1.2860 region where the previous swings can act as support and push price higher.
GBPUSD, 4H
Ending diagonal
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
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