Elliott Wave Analysis: Ending Diagonal

Elliott Wave pattern

Ending Diagonal

Elliott Wave Analysis - Ending Diagonal

We had the Ending Diagonal as an important Elliott wave pattern (or without using the Elliott wave analysis terms also called a Three-Drives pattern) on the 5 min chart (C-Wave of the ABC retracement) at the beginning of the US trading session. The Ending Diagonal terminated at the  61.80 % Fibonacci Extension of  wave A at 1.2983 (5 min chart analysis).

The internal waves/ swings down of wave C lost strength and got shorter. The typical impulsive up move after the termination of this Elliott wave pattern (Ending Diagonal) found resistance at the 200 SMA on the 5 min chart analysis.

A further support zone besides the 61.80 % Fibonacci Extension at the termination point of the final wave C was the price zone of the prior flat consolidation pattern visible on the hourly EUR/USD Chart below. These Consolidation zones often proide Support/ Resistance when market price retraces into this zone for the first time.

The Ending Diagonal similar to the Three-Drives-Pattern are chart patterns, which fit well into the
Market Price Manipulation in Forex. 

These Chart patterns illustrate the process of market manipulation in regards of targeting/ taking out the stop orders (Stop Runs) and fooling breakout traders.

5 min Ending Diagonal analysis

1 hour EUR USD Trading Analysis

Some further Chart Analysis examples with the Ending Diagonal Chart pattern

Monthly Support on the Euro US Dollar Chart and an Ending Diagonal pattern (Elliott wave theory)

Monthly EUR/USD  Support Resistance

1 hour Euro chart analysis

On the monthly chart we see that the monthly candle (May) closed at the low from 2008. On the hourly chart we see that EUR/USD turned around at the 61.80 % fib retracement and that market in the following took out the previous low at 1.2358 but did not confirm the breakout (stop fishing) and instead created a bullish doji candle.

5 min EUR/USD Ending Diagonal Elliott Wave Pattern

On the 5 min chart we see that EUR/USD created a kind of inverted Head and Shoulders "overnight"  (A-B), which got triggered. The up move terminated at the hourly 61.80 % fib retracement (blue line) and market formed an ending diagonal (Elliott wave pattern) at the resistance (wave E). Ending Diagonals are normally preceeded by an impulse wave (C) and develop as the second trend wave of an ABC or as the "5th wave" of an impulsive pattern. The initial target after termination is often the start of the Ending Diagonal (D) (green line).

EUR/USD took out the previous low (red line). The breakout candle is very strong as many stops below the low got triggered, however, there is no confirmation of the breakout on the 5 min chart. Market reversed and found some resistance at the 200 SMA

Another Ending Diagonal Triangle

 Ending Diagonal pattern on the Euro US Dollar Chart

EUR/USD market formed an Ending Diagonal pattern (C-wave) and the Euro reached the standard target, which is the complete retracement of the C-wave (below point B) at 1:55 p.m. GMT (also trendline-support).

5 min Ending Diagonal pattern

Another Diagonal with impulsive move after termination of the diagonal triangle pattern

5 min Ending Diagonal chart analysis

On the 5 min EURSD technical chart we see that market made an abc retracement from the support zone (Z) (EUR/USD techncial chart analysis update 29.05.12) up to the 100 % fib extension (A) before market moved lower (B). In the following market retraced up to the 200 SMA and the small "overnight" consolidation (C ).

The following wave structure looks like an ending diagonal, which terminated at the 100 % fib extension (A-B at C) before the upward breakout  to the 200 SMA occurred (E). However. the 200 SMA and particularly the 20 SMA on the hourly (not shown) provided resistance and  market reversed down again, firstly to the 61.80 % fib extension and secondly to the 100 % fib extension from F-G at H. Quite often, the move down got triggered by the 20 SMA e.g. at H and I after the termination of the 3-wave consolidation pattern (circled).

Flag Patterns, Pivots and SMA

Chart Analysis of the Euro

Daily Pivot Point

1 hour Fib Extension

Price Zone of the Consolidation pattern

 Today in the Asian session EUR/USD went lower but market found support at the gap close from the trading day before at 1.2518 and the tight price zone of the consolidation pattern at this price level (Z).  The Euro moved up from this support price level (C) and penetrated the daily pivot point (1.2563) (D) but found resistance in the price zone of yesterday's consolidation pattern (B). Since then EUR/USD is trading lower.

5 min Euro us dollar chart analysis

Bull flag

 On the 5 min chart we see that yesterday's consolidation price zone at about 1.2540 (1) provided some resistance (2) before market went up further. The daily low from May 23 at 1.2545 (red line) still seems to have some impact (red circles). Market consolidated (3) (Bull flag) and closed (7 a.m. hourly candle) at the red line before market broke out of the bull flag initially at the beginning of the new hourly candle at 8 a.m.(breakout candle).

The breakout candle respected (closed at) the daily pivot point, consolidated there (4) and broke through it triggered by the increasing 10 SMA on the 5 min chart. However, the breakout of the following small bull flag (5) just above the pivot point only reached the 61.80 % fib extension (a-b at c) (rejection) and the Euro turned around. Market price respected and then moved below the 10 and 20 SMA on the 5 min chart.

The EUR/USD market traded in a tight 20 pip range between 11 a.m. and 1 p.m. capped by the 200 SMA before market created a typicalthree swing consolidation pattern (ABC), which also can be regarded as a bull flag from the previous swing down (hourly chart) (the first swing/ wave (A) in the consolidation terminated at the 61.80 % fib retracement; the second wave (B) at the 61.80 % Fib extension from the previous swing down at A).

After the three swing consolidation pattern terminated (C) market broke down strongly (high momentum) and market took out the previous lows, particularly the recent low from 25th of May at 1.2496 (blue line). Market only initially respected the support zone of the daily S1, low from 25th of May and the 100 % fib extension (4:35 p.m.) before the Euro moved down further to find some support at the daily S2 pivot, the hourly 100 % fib extension (A-C at D) and the 161 % fib extension on the 5 min chart.

10 and 20 SMA

During the strong move down (5 min SMA's were far away from price) the 10 and 20 SMA's on the 1 min chart (not shown) seem to become the trigger signals, e.g. at 4:41 p.m. (6), as long as the momentum stayed strong and market did not reject the decreasing SMA's on the lower time frame-1 min-.