Intraday Ending Diagonal On GbpUsd

If there is a pattern I enjoy watching out for, it is the ending diagonal or what many chart pattern trader call Wedge formation. 

 

This pattern , apart from its ease to spot and reliability, it also gives an excellent risk reward ratio especially when it ends a correction like what we are having presently in the 1 hour chart of Gbpusd.

 

Since August 2014, the cable has been undergoing a very sloppy run of bearish movement.

 

Going by the daily chart, price could presently have completed wave 3.

 

 Due to the fact that wave 3 is expected to be a 161.8% fibo extension of wave 1, presently price is at 138.2% extension. 

 

 

This shows that there could still be some room downside to complete what would probably be the last wave of the third wave before we have the last correction of the bearish impulsive move. 

 

The price wave formation on the 1 hour chart strongly supports this count with a corrective zigzag formation ending with a clear ending diagonal.

 

 

price should take a dive to 1.4680 ( 161.8% extension of primary wave 1 and 127% extension of subsidiary wave 1)

 

I expect to sell from here as negative divergence formed on the daily chart further gives more confidence.

 

However the price moves, I will update you.

 

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