Elliott Wave Analysis: USDCAD Showing First Signs of A Top; A Reversal May Already Be Here
USDCAD made a sharp and swift move to the downside at the end of last week, which was expected as we were tracking late stages of an ending diagonal. As such top for wave 5) was found at the 1.3793 level and current weakness may now be the first wave of a minimum three wave reversal.
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 and they usually suggest sharp reversals.
Ending diagonal pattern:
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