USDCHF fell to a new low of the year so the market remains in bearish mode as long as the 0.9080 swing high is not breached. But, the question is: for how long?
We are looking at an ending diagonal pattern in wave C that suggests a coming bullish reversal sometime this year, most likely in the second part of 2014.
On the chart we are tracking wave (5) now, the final leg in the pattern that will reach new lows and possibly find a support at 0.8500-0.8600 area.
What is an ending diagonal?
 
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 “C†wave. In all cases, they are found at the termination points of larger patterns, indicating exhaustion of the larger movement.
