USDMXN Pausing A Bear Trend

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Hello traders!

It appears that USDMXN completed a five-wave drop which started back in March. A reversal that we see right now, is actually not a big surprise if we consider that wave five came out of a triangle correction that was recongized in wave four. Keep in mind that triangle occurs prior to the final move within a higher degree trend, so that trust out of the contracting pattern is final within higher degree wave A. From that low price started to turn impulsively and it broke out of an Elliott wave channel, thus confirms a low in place for a bigger impulse. As such, we can expect that USDMXN makes a three-wave corrective recovery to accomplish a full eight wave cycle. Usually this whole corrective rise stops at price levels of a former wave four, at around 22.9/23.2 region, or it can also retrace the 61.8% of a previous decline. But lets keep in mind that in some rare occasions an A-B-C movement can also retrace 100% of an initial five wave drop. But what really matters is that when a three wave correction is completed, confirmed by a new impulsive sell-off, then a new opportunity will show up on the short side of this pair.

Be humble and trade smart!

USDMXN, daily


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