Completed ending diagonal on USD/CHF suggests higher levels to follow

June 13, 2017 09:16 AM
Elliott Wave Analysis: USD/CHF

On the 4-hour chart of U.S. Dollar/Swiss Franc (USD/CHF) currency pair we can see that at the end of May, the market accomplished a three-wave recovery in Wave 4 as part of a downtrend; at the 0.9807 level from where a drop occurred, which we labeled as final Wave 5 of C). Ideally that was an ending diagonal; a strong reversal pattern that looks to have formed a bottom at the 0.9612 level and a current recovery is already at Wave 1/A and 2/B of a three wave rally. That being said, more gains are expected to follow.

USD/CHF, 4-hour

The ending diagonal is a special type of motive wave that occurs primarily in the Wave 5 position when a  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 and they usually suggest sharp reversals.

Basic ending diagonal:

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About the Author

Gregor Horvat, based in Slovenia, has been in the forex markets since 2003. He is a technical analyst and individual trader who has worked for Capital Forex Group and He also is founder of forex services on provides technical analysis of the financial markets, highlighting behavioral patterns based on the Elliott Wave Principle (EWP). Website: