USDMXN Trapped In A Triangle With Possible Drop To 19.00 - Elliott Wave
Oct 10 2019
After that very sharp and extended move up on USDMXN from 2014 through 2015 and 2016 the pair is now sideways which looks like a triangle. A lot of non-EW oriented traders would see this as a continuation pattern, which is fine, but from an EW perspective I assume that contracting range is part of weakness that is taking pair away from 22.00 high. Why? Because I see first drop from 2017 high very sharp and strong; to me it looks like an impulse, labeled as a wave A) that belongs to an ongoing and deeper wave four correction. If not mistaken, then this fourth wave should be made by three A)-B)-C) waves. But why I think this pair can be interesting now is because B)-wave triangle ca be coming to an end.
I like that price action on a daily chart from 20.25 to 19.31 is impulsive so it suggests that a three wave rise from April 2019 low is completed. And what is the best part is that even if consolidation is not finished yet, I still think that the lower side of the range will be retested around 19.00 region which is my minimum downward objective.
Any sharp drop below the 18.75 area would suggest an aggressive drop lower into a wave C). However, any rise above the 20.25 region would invalidate our current view, and that is also the price where we would start considering more direct-bullish interpretations.
Trade well, and talk to you soon,
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