Possible EW Ending diagonal on 10 Year US Notes Suggest A Pullback

Intermediate

10 year US notes can be trading at the end of a higher degree wave III. Specifically we see price unfolding an overlapping price movement within sub-wave 5 of three, that looks more and more like a Elliott wave ending diagonal. The speciality of this pattern is that it can cause a sharp a strong turn into the opposite direction, in our case into corrective wave IV, which could see limited upside near the 121.09 level, at the starting point of the pattern. From there more weakness may follow into wave V.

10 Year US Notes, 4H

4h 10 year US notes

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 ā€œCā€ wave. In all cases, they are found at the termination points of larger patterns, indicating exhaustion of the larger movement.

  • structure is 3-3-3-3-3
  • a wedge shape within two converging lines
  • wave 4 must trade into a territory of a wave 1
  • appears primarily in the fifth wave position, in the C wave position of A-B- C and in double or triple threes as the final ā€œCā€ wave

EW ending diagonal:

Elliot Wave Diagonal

Read more technical analysis.

Elliot Wave Technical Analyst

Gregor Horvat is based in Slovenia and has been in the Forex market since 2003. He has been working for Capital Forex Group and TheLFB.com.

He is the owner of www.ew-forecast.com, which prov...continued

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