Today is Sunday so let look at which pairs to trade for the week ahead, please note that we have a very busy week ahead in terms of news. We have big news on Canada and USA, so this pair will be very volatile the whole week, just trade carefully for small time frame traders. Getting on it we have been waiting for this leading diagonal pattern to complete and it finally completed this week. If you see the end of wave 5 has price rejection candlestick patterns, also failing to go above the trend line. We saw that as very good opportunity to go short, and we are in profit already. I posted on our Facebook page.
Since leading diagonal is a 5 wave structure we are expecting 3 more waves downwards to correct the impulsive waves. I also included the trend lines showing the start of the leading diagonal and wave 1 leads to the good possible resistance level. After this 3 waves, I’m expecting this pair to continue it bullish move starting wave 3 which will take us closer to completion of wave 5. This diagonal pattern is based on the assumption that wave 4 has finished on the bigger time frame, but don’t worry I’ll show you bigger time frame so that we can forecast the long term of this pair.
Looking at the long-term view chart above, we can see that we are in wave 5, provided wave 4 has finished but look like it is. So as we have leading diagonal which is wave 1 of wave 5, right now we have begun wave two which I’m expecting it to be, zig zag. Usually, after leading diagonal we get simple wave 2, like sharp zig-zag which goes very fast, then we start wave 3. Please note that wave 2 can go below the trend line that I projected it will end, but must not go below the invalidation line, Elliot wave rules will be Broken if it does. As I said that the next week will decide which way we are going for this pair, but the forecast is we are bearish for now but long term we are bullish as we are in wave 5.
Good luck with your trading guys.