EUR/AUD's decline from a new spike high at 1.4510 is an early indication that top is in place and that market is headed south. Notice how strong this downward reaction is; it's something you always should expect after an ending diagonal formation.
That said, we think that EUR/AUD is now headed back to the start point of the pattern, to one 1.4130. In the meantime, any upward reaction should be made up off small pullbacks within a bearish leg.
EUR/AUD, 30 Min
The ending diagonal is a special type of motive wave that occurs primarily in the wave 5 position when 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.
Basic Ending Diagonal Pattern:
