close icon

USDMXN Precisely Followed Its Elliott Wave Path

It has been almost four months since we last wrote about USDMXN. On January 30th, the pair was hovering around 18.70, following a sharp selloff from 19.90 to 18.30. The good news was that instead of wondering what the Dollar-Mexican Peso exchange rate was going to do next, we managed to recognize a very reliable Elliott Wave pattern on the 4-hour chart of USDMXN. It not only gave us a clue about the very next move, but actually put us ahead of the pair’s next three swings. Take a look at this chart to refresh your memory.

usdmxn elliott wave analysis

The pattern in question was a textbook five-wave impulse between 17.45 and 19.90, labeled 1-2-3-4-5 in wave (A), where the sub-waves of wave 3 were also clearly visible. According to the theory, impulses point in the direction of the larger pattern, but are also followed by a three-wave correction in the opposite direction. Since the decline from 19.90 to 18.30 was also impulsive, we concluded waves B up and C down of wave (B) still need to develop, before the bulls return to lift USDMXN to the 20.00 mark in wave (C).

Of course, there was no way to predict what was going to happen in the world in the next four months. We did not even know it was going to take USDMXN four months to complete the sequence. The pattern above provided all the information an Elliott Wave analyst needs.

usdmxn update elliott wave analysis

Wave B of (B) took the pair to 18.98 on March 2nd. Then wave C caused the price to fall to as low as 17.94 on April 17th and put the entire three-wave decline in wave (B) to an end. The 5-3 wave cycle was complete and the door to 20.00 in wave (C) was wide open. A little over a month later – on May 21st – USDMXN breached 20.03. Wave (C) is also an impulse, which makes the entire three-wave recovery from 17.45 look like a complete (A)-(B)-(C) zigzag. If this count is correct, the bulls would be better off staying aside as a notable bearish reversal might already be in progress.

Did you like this analysis? Our practical Elliott Wave guide can teach you how to do it yourself and help you take your trading to the next level!

Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

Japanese Yen Refuses to be the Dollar’s Latest Victim

Last week, when most major currencies like the euro, the Canadian dollar and the British pound (not to mention the Turkish lira) fell against the U.S. dollar, one currency managed not only to hold its ground, but to actually gain some against the greenback. The Japanese yen ‘s rise dragged the USDJPY pair down to…

Read More »

Two Months Ahead of EURUSD ‘s Turkey-Driven Selloff

EURUSD’s selloff has resumed. The pair fell to as low as 1.1432 earlier today, following a Financial Times report stating the European Central Bank is concerned about some European banks’ exposure to Turkey’s currency crisis. Spain’s BBVA, Italy’s Unicredit, and France’s BNP Paribas were among the big names mentioned in the report. Now, let’s see how…

Read More »

AUDNZD Gains 500 Pips After Fibonacci Encounter

AUDNZD shot up sharply today, following a statement from the Reserve Bank of New Zealand that cemented the country’s interest rate at its current level for the foreseeable future. The pair was trading below the 1.1000 mark before the announcement, but rose to 1.1175 shortly after it. However, if you have been following our publications…

Read More »

GBPJPY Bears Remove a Major Hurdle

It has been less than 20 days since our last update on GBPJPY. On July 20th we shared our view that the pair is “looking into the hard Brexit abyss” and while the pair was trading around 146.20, we concluded that much lower levels should be expected. Of course, the bearish outlook was not based…

Read More »

USDCAD Down After a Tricky Elliott Wave Pattern

USDCAD climbed to 1.3290 on July 19th, but instead of lifting the pair even higher, the bulls lost momentum. A bearish reversal followed as a result. By July 25th, when we had to send our next update to subscribers, USDCAD was down to 1.3135. Was it a buy-the-dip opportunity or the beginning of a bigger…

Read More »

USDMXN Set to Recover, but Remains Vulnerable

It has been a painful month and a half for USDMXN bulls. The pair was almost touching the 21.00 mark on June 15th, when the bears returned with a vengeance to drag it to as low as 18.58 for an 11.3% plunge by July 26th. Some explain the strength of the Mexican Peso with the…

Read More »

New Forex Regulations in the European Union!

Forex regulations are about to change on the 1st of August for all traders in the EU. What’s happening? The European Securities and Markets Authority will force brokers to lower the leverage they offer on the four major currency pairs – EUR/USD, USD/JPY, GBP/USD and USD/CHF to 30:1. Minor pairs will see an even larger…

Read More »

More analyses