Expanding Ending Diagonal (EED) Explained

What Is an Ending Diagonal Pattern?

The Ending Diagonal (Rising Wedge) is a special type of chart formation that appears in very specific market conditions:

• Wave Position: It typically occurs in the fifth wave of an impulse or the C wave of an A-B-C correction.
• Market Psychology: It represents exhaustion of trend momentum, where price continues to push higher (or lower) but with diminishing strength.

Why the Ending Diagonal Is Reliable

The Ending Diagonal is considered one of the highest-probability trading setups because:

• At minimum, price action will retrace back to the start of the pattern.
• In many cases, the reversal goes even deeper, depending on the wave count.
• This makes it a favorite for traders seeking precision reversal entries in forex, stocks, and even crypto markets.

Trading the Pattern Effectively

When trading GBP/JPY or any other pair with an Ending Diagonal/Rising Wedge setup:

• Confirm with Volume: Look for declining volume as the wedge forms.
• Watch Support/Resistance Zones: The breakout target is often aligned with previous levels.
• Use Multi-Timeframe Analysis: Confirmation on higher timeframes increases reliability.
• Combine with Indicators: RSI divergence and MACD rollovers often strengthen the signal.

Related Reliable Chart Patterns

While the Ending Diagonal is a standout, traders should also study other reliable technical analysis patterns, including:

• Head and Shoulders – Classic reversal pattern
• Double Top/Double Bottom – Trend exhaustion setups
• Triangles (Ascending, Descending, Symmetrical) – Consolidation and breakout patterns
• Flags and Pennants – Trend continuation with momentum

Final Thoughts

For GBP/JPY and beyond, mastering the Ending Diagonal (Rising Wedge) gives traders a reliable edge. As part of the Elliott Wave framework, this pattern consistently delivers high-probability reversal opportunities, making it one of the most reliable trading patterns in technical analysis.