Silver (XAGUSD) – Potential Ending Diagonal in Wave C

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.