Looking at the 4-hour chart of DAX, we can see a strong rebound in the last two months back to new ATH, but bulls can be losing some strength up here as we see price turning back down to 19k area, where overlap with black wave I put wedge shape in action. We are talking about ending diagonal, with wave IV retracement back to around 18850/18900 support, from where we see nice turn higher for wave V that can be made in three legs A-B-C. It can actually send the price even up to 20000 area for wave C of V after current subwave B pullback, where the lower diagonal line at 19300 support area still nicely holds.
An ending diagonal pattern in Elliott Wave Theory is a five-wave structure (1-2-3-4-5) where each wave subdivides into three smaller waves (3-3-3-3-3), waves 1 and 4 overlap, wave 3 is not the shortest, wave 4 does not exceed the origin of wave 3, and the pattern forms within converging trendlines, often signaling a market reversal.More By This Author:GBP/AUD And GBP/NZD Pairs Step Into Final Leg Of A Recovery
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