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:

GBPJPY: Bearish Reversal Expected Near 151.00

GBPJPY has been in recovery mode since it touched 139.90 on August 15th. On September 21st, the pair climbed to a multi-month high of 149.72, but fell to an intraday low of 146.51 yesterday. As of this writing, the Pound is hovering around 147.90 against the Japanese yen. The time is appropriate to apply the…

Read More »

USDCAD Unreliable Resistance Identified in Advance

After slightly exceeding 1.3000 on October 8th, USDCAD retreated to 1.2926 two days later. Given that the pair has been declining since the 1.3386 top registered in late-June, assuming the bears are returning was quite justified. In addition, there was a declining trend line, which had previously led to significant selloffs on two separate occasions.…

Read More »

USDJPY Gave Us a Road Map Three Months Ago

There is a reason why it is called “trading” and not “bottom/top picking”. The latter is literally impossible even with the best trading tools and techniques. Even the Elliott Wave Principle, which we consider to be the best method for price behavior analysis, cannot tell us the exact price level at which the market is…

Read More »

GBPCAD ‘s Rally Needs a Healthy Pullback

October is shaping up to be a good month for GBPCAD bulls. The pair dipped below 1.6600 on October 2nd, but quickly reversed to the upside for a recovery of over 470 pips so far. Earlier today the Pound climbed to as high as 1.7070 against the Canadian dollar. However, extrapolating the current trend into…

Read More »

A Week of Trend Reversals in the Forex Market

The Forex market was very interesting to observe last week. Major news like the Non-Farm Payrolls report in the U.S., the new trade deal between the USA, Canada and Mexico, and Bank of Japan’s determination to keep fighting deflation all contributed to an eventful five days in the world’s largest market. News and events is…

Read More »

USDMXN: Is the 18.50 Support Going to Hold?

It has been over two months since our last article about USDMXN. On July 27th, the Forex pair was trading slightly above 18.6150. The Elliott Wave Principle then suggested “a corrective rally to 19.50 – 20.00 is about to interrupt the downtrend in the near future.” The logic behind our optimism was simple: there was…

Read More »

EURUSD: When the Fed Supports the Elliott Wave View

Following a recovery of more than 500 pips in a little over a month, EURUSD suddenly crashed from 1.1815 to 1.1570 last week, erasing half of its recent progress in just a few days. The selloff came after the Fed raised its benchmark interest rate for the third time this year on Wednesday and promised…

Read More »

More analyses