EURUSD: Ending Diagonal Could Cause A Turning Point At

EURUSD has extended its gains in the last few weeks back above 1.3800 and now also to 1.3900 where the market may complete a huge ending diagonal pattern.

The ending diagonal is a reversal pattern which means that EURUSD could fall sharply in the beginning of 2014.

On the 4h chart we can see a recent spike to 1.3900 which makes the move from 1.3290 more extended and complex. Notice that we labeled the rally in wave 5) as a double zigzag because of the overlapping price action.

Keep in mind that we are tracking an ending diagonal on a daily chart as mentioned about where each leg has a corrective structure. So if our count is correct then a bearish turning point could be near, especially if we consider a 150 pip pullback from latest high.

We suspect that the pair will continue lower, but we would love to see broken channel support line as well as wave B swing low to confirm a change in trend. We can also see a bearish divergence on the MACD that is calling for a turning point.

Gregor Horvat

Grega Horvat Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of Ew-Forecast, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on 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 Ew-forecast he helps clients and educates them about the Elliott wave principle 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. EW-Forecast To be involved in the market effectively, you need the right guidance and resources, and our team can help you to achieve that. Our team is providing advanced informations about Elliott Wave theory in real time. The Elliott Wave Principle gives you a method for identifying the behavior of the markets and at what points the market is most likely to turn. We help new traders who are interested in Elliott Wave theory to understand it correctly. We are doing our best to explain our views as simple as possible with educational goal, because knowledge itself is power!

View all posts by Gregor Horvat