Good day traders! Today's focus is on GBPNZD and its 4h movement.

GBP/NZD is showing us a bigger three-wave recovery, which can be a corrective pattern in play. Ideally, current and final leg C will unfold as an ending diagonal pattern and search for resistance and a top near the Fibonacci ratios of 50.0 and 61.8. From there we think bulls may slow down and a new reversal lower can come in play.

GBP/NZD, 4H

The ending diagonal is a special type of motive wave that occurs primarily in the wave 5 position when the price has moved too far and too fast. Some ending diagonal triangles appear in the C wave of an ABC correction. In all cases, the ending diagonal terminates the move of larger patterns. They consist out of five waves, with each having three more sub-waves and they usually suggest sharp reversals.