Elliott Wave Zigzags: Complete Guide & Fib Relationships

This DXY Elliott Wave analysis examines a 4H wave (2) zigzag correction within a larger bullish wave (1) impulse, highlighting the support cluster around prior wave‑1 lows and the 0.618 retracement.

Wave structure and context

On the 4H chart, this DXY Elliott Wave analysis labels the advance into the recent high as wave (1) and the current decline as wave (2) in a zigzag within a well‑defined corrective channel.

• Higher timeframe count labels the advance into the recent high as wave (1) impulse, with the current decline mapped as wave (2) correction unfolding as a clear A‑B‑C zigzag within a well‑defined red corrective channel.​
• Wave C is probing into the green support box between the 0.618 retrace near 97.918 and prior wave‑1 support around 97.808, aligning price, structure and fib symmetry for a potential completion of wave (2).

Key levels and trade plan

• Support is anchored at 97.808 (wave‑1 low), with resistance at 98.764 (wave A) and upside fib targets projected toward the 0.5–0.618 extension window at 122.102–132.161 for the prospective wave (3) advance.
• The trading plan favours a long bias from 98.415, with protective risk just below 97.698 under wave‑1 support and an initial take‑profit focus at 121.258, assuming the corrective channel eventually breaks to the upside.

Confluence and validation

• Confluence comes from the 0.618 fib tap at 97.918, price still respecting the corrective channel boundaries, and 4H RSI divergence, all consistent with a maturing corrective low rather than fresh impulsive selling.
• This DXY Elliott Wave analysis roadmap ties in with your broader cross‑market view in the existing DXY, gold and GBPJPY analysis, with the invalidation zone below 97.698 acting as the line in the sand that would negate the immediate long scenario and force a reassessment of the wave count.

Silver (XAGUSD) Potentially Completing Wave C of Zigzag with Ending Diagonal Structure

Silver’s price action on the 4-hour chart has been exhibiting a textbook Elliott Wave zigzag correction, and current developments suggest that the terminal C wave may be approaching its conclusion with an ending diagonal pattern. This structure is of particular interest to both Elliotticians and active traders, as ending diagonals frequently signal an impending reversal or the final stage of a correction.

Context: The Ongoing Zigzag

After an impulsive downward leg, the ensuing corrective sequence has traced out a classic zigzag pattern: wave A established the initial rebound, wave (B) retraced a significant portion of (A), and the current wave C has unfolded with strong upward momentum. This is consistent with a standard 5-3-5 zigzag structure, where waves (A) and (C) are motive, and wave (B) is corrective.

A key Elliott Wave guideline is that wave (C) in a zigzag should itself display impulsive qualities, subdividing into five smaller waves. In some cases, especially near the end of complex corrections or when momentum begins to diverge, this fifth wave can form what’s known as an ending diagonal, also called a wedge or terminal pattern.

Technical Details: Spotting the Ending Diagonal

In the present silver chart, wave C has advanced within a narrowing channel, creating visible overlaps between minor subwaves—a hallmark of the ending diagonal pattern. Elliott Wave analysis dictates that ending diagonals comprise five subwaves (labeled 1-2-3-4-5), each constructed with three minor waves (a so-called 3-3-3-3-3 structure), and typically feature contracting or converging trend lines. These patterns signal exhaustion, as buyers and sellers become increasingly cautious near a major correction’s conclusion.

On the chart, resistance aligns with the upper boundary of the wedge and Fibonacci extension levels around 0.764 (52.357). Support can be anticipated at the lower wedge and near the 0.618 retracement level (51.063), providing clear reference points for risk management.

Expected Outcomes and Trade Considerations

Should the ending diagonal in wave C complete as anticipated, traders should watch for:

• A decisive breakdown below the diagonal’s lower trend line, which would provide early confirmation of a reversal.
• Potential acceleration to the downside as stops are triggered and trend-followers re-engage.
• Opportunities to align with the trend resumption, especially if price action confirms with volume expansion and wider candles.

Conversely, invalidation would require a sustained break above the diagonal’s resistance, suggesting the correction may not be over or has transformed into a more complex structure.

Broader Lessons for Elliotticians

This real-time example underscores the power and precision of Elliott Wave analysis. By identifying higher-order corrective patterns and then recognizing terminal structures within them, traders gain both risk management cues and early signals for trend reversal.

If you’re following the silver market or applying Elliott Wave to your trading, this is a prime opportunity to study structure in action. How will price resolve from here? Will the textbook structure play out, or does the market have another surprise? Join the discussion below and share your own analysis or questions.