Good morning traders.
On USDNOK we were observing an idea of a Elliott wave leading diagonal that started to unravel from the lows of 2018 and looks to have found a top near the 8.530 region recently. A confirmation for a top is the following three-wave drop that occured from the highs, which can be a blue wave 2 of a higher degree that can look for a base near the 8.00-7.98 area. That said once current correction fully unfolds, a new bullish continuation may follow towards 8.60 region.
Now back to our leading diagonal. A leading diagonal pattern occasionally appears in the first wave position of impulses (cycles) and in the A wave position of zigzags. They take on the structure of a 5-3-5-3-5 and form a wedge shape within two converging lines. For a valid Elliott wave leading diagonal wave 4 must trade into a territory of a wave 1, which means they must overlap.
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Elliott wave leading diagonal