USD/NOK completes a corrective recovery [Video]

Gregor Horvat Wavetraders

USDNOK made some recovery recently, but in three legs only, which indicates for a correction within the downtrend by Elliott wave theory, called a zig-zag. It stopped perfectly at equal wavelength of waves (A)=(C) and at the channel resistance line, so bears can be back, especially if it breaks below 10.0 level.

USD/NOK two-hour chart

A zig-zag correction within a bearish trend is a temporary upward retracement that moves against the main downtrend. It follows the A-B-C (5-3-5) structure, where waves A and C are impulsive bullish moves, while wave B is a smaller bearish correction between them. It represents a sharp countertrend rally within a larger bearish cycle, after which the main downtrend typically resumes.

Basic Zig-Zag corrective pattern

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Author

Gregor Horvat

Wavetraders

Experience Grega is based in Slovenia and has been in the Forex market since 2003.

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