Here's an update to the dollar chart I posted yesterday showing that potential ending diagonal for the 5th wave of (c) in a wave [iv] correction.
Dollar 60 min chart:
It did make a slightly lower low, which was the risk I mentioned yesterday, but it does now look even better as an ending diagonal. With the way it has developed, today's low may well be the end of the pattern. That low is 83.622, but note that further downside is possible provided 83.315 isn't taken out - that would make wave [5] longer than wave [3], which would invalidate the pattern.
Really, as mentioned yesterday, we want to see the wave [4] high taken out to increase the odds that the pattern is complete. I've marked what I think is the wave [4] high at 83.985.
Even if we do exceed that high, we have to watch the low of the pattern, wherever that may end up being, since once this pattern is complete, that low should not be taken out and if it is, then something else is happening. In this case, it may be that its not an ending diagonal but a leading diagonal for only the 1st wave of wave v of (c). At this stage I don't think that is likely, but its not something that can be ruled out.
The MACD and its histogram do seem to be indicating that a bottom of sorts may not be far off. The MACD has been diverging bullishly against the new lows in price since 1 July and despite the downward movement in price yesterday, the histogram barely got below zero and, in fact, spent most of the time above the zero line. Still, its price that matters and the levels given above are what I'll be watching.
