Since wave C cannot be the shortest wave, we estimate the current high at 1.757 is the top of this whole structure. If prices move beyond this level, we would have to relook at the whole wave structure again.
Typically leading diagonals has the longest wave 1 of the entire 5 wave move, which is true in this case. Several fibonanci projection levels and retracement also gels with the above chart.
Leading diagonals typically deeply retraces wave 1, 61.8% to 78.2% of the entire move. We are looking for a 3 wave corrective structure to take place. Zig Zacks are quite common.Thus our take profit take is set between those levels.
Trade Idea :
Short at 1.751
Stop Loss, 1.758
Take Profit : 1.67 (First target)
I'll zoom out the chart and relabel it properly.
We are expecting a 5-3-5 move to the downside. (Zic Zag are the most common)
Also reason I labelled 1/A and 2/B, is because this could be part of a complex correction stretching back a couple of months. We will need to reassess the wave pattern as it plays out.
If this is not the correct wave count, then the whole structure of the leading diagonal collapse. On hindsight, I should have waited for the 5 of 5 wave to complete before entering a short.