Elliott wave Analysis: USDMXN Trading in a Temporary Correction

USDMXN made a clear five-wave drop from 19.913 high, where a higher degree wave C found a top. We labeled this five-wave decline as wave I, the first wave of a bigger bearish cycle, which can resume once the current corrective wave II finds resistance. As we know, wave II is a corrective wave, meaning it will be choppy and overlapping, and ideal in three legs.

In our case, we can see first leg A and second leg B completed, and a current sharp rally from 18.4192 level can be an impulsive wave C, the final leg of a bigger correction, that can see a limited upside near the 18.9776/19.1650 region.

USDMXN, 4H

Now taking a closer look at the hourly chart where we can see a nice five-wave recovery to be in progress. Specifically we see the price trading within red wave 3), with its leg 5 searching for a temporary top and resistance, ideally around the 18.892 zone, where Fibonacci projection of 200.0 sits. From there a minimum three-wave retracement can follow as red wave 4).

USDMXN, 1H

Gregor Horvat

Grega Horvat Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of Ew-Forecast, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on FXstreet.com, Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu, Insidefutures.com, etc. He recently won the award on FXStreet.com for Best Forex Analysis in 2016. At Ew-forecast he helps clients and educates them about the Elliott wave principle and how to label and track unfolding patterns in real time. His approach to the markets is mainly technical. He uses a lot of different methods when analyzing the markets such as candlestick patterns, MA, technical indicators etc. His specialty, however, is Elliott Wave Theory which could be very helpful especially if you know how to use it in combination with other tools/indicators. EW-Forecast To be involved in the market effectively, you need the right guidance and resources, and our team can help you to achieve that. Our team is providing advanced informations about Elliott Wave theory in real time. The Elliott Wave Principle gives you a method for identifying the behavior of the markets and at what points the market is most likely to turn. We help new traders who are interested in Elliott Wave theory to understand it correctly. We are doing our best to explain our views as simple as possible with educational goal, because knowledge itself is power!

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