NZD/USD In For A Three-Wave Drop: Elliott Wave Analysis
NZD/USD: Wave 4 has recently completed its three-wave ((A)-B)-C)) recovery at the upper trend line, which then started a new sharp drop into a final wave 5 of a bigger Elliott wave ending diagonal. We see a strong break below the two trend lines, which suggest an A)-B)-C) move to be in play within a final wave 5.
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.
ew ending diagonal
Example of an EW ending diagonal: