This is a clear cut leading diagonal pattern. Above is a clearer wave count of the whole structure. Leading diagonal moves in 5-3-5-3-5 structure, unlike an ending diagonal, which is 3-3-3-3-3.
Since wave C cannot be the shortest wave, we estimate the current high at 1.757 is the top of this whole structure. If prices move beyond this level, we would have to relook at the whole wave structure again.
Typically leading diagonals has the longest wave 1 of the entire 5 wave move, which is true in this case. Several fibonanci projection levels and retracement also gels with the above chart.
Leading diagonals typically deeply retraces wave 1, 61.8% to 78.2% of the entire move. We are looking for a 3 wave bearish corrective structure to take place. Zig Zacks are quite common.Thus our take profit take is set between those levels.
Trade Idea : Short at 1.751 Stop Loss, 1.758 Take Profit : 1.67 (First target)
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I'll zoom out the chart and relabel it properly.
We are expecting a 5-3-5 move to the downside. (Zic Zag are the most common)
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Depending on the first wave of the corrective move, we could determine if its going to be a ZZ or a flat. ZZ= 5-3-5, Flat=3-3-5
Also reason I labelled 1/A and 2/B, is because this could be part of a complex correction stretching back a couple of months. We will need to reassess the wave pattern as it plays out.
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It is really stretching to the maximum point of the allowed length. If it crosses 1.7585, it will invalidate the rule that wave 3 cannot be the shortest wave.
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If this is not the correct wave count, then the whole structure of the leading diagonal collapse. On hindsight, I should have waited for the 5 of 5 wave to complete before entering a short.
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Just wow.. Market took my SL and went reverse all the way down.. I'll be looking for a entry to short. Stop loss will be set above swing high of 1.76