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:

USDCNH Elliott Wave Pattern Points to Recovery

Less than five months ago, on November 1st 2018, the U.S. dollar climbed to 6.9806 against the Chinese yuan, following a sharp rally from as low as 6.2359 in March. Unfortunately for bulls, USDCNH couldn’t maintain the positive momentum. As of this writing, it is hovering around 6.7200. In order to find out if the…

Read More »

NZDUSD Bulls Choosing a Path to 0.7000

Less than three months ago, on January 7th, we published an analysis of NZDUSD. It was trading near 0.6750 at the time, following a sharp decline from 0.6970. However, instead of simply extrapolating the selloff into the future, we examined the chart below through an Elliott Wave perspective. And it gave us a few reasons…

Read More »

USDJPY: How to Buy and Hold a Forex Pair

USDJPY has been in recovery mode since the “flash crash” on January 3rd. The pair plunged to as low as 104.82 that day, but the bears couldn’t maintain their momentum. The market reached 112.14 on March 5th for a rally of over 730 pips. Of course, picking up all of it would have been pure…

Read More »

USDCAD Bears Paying the Price for Failing at 1.3069

A week ago, USDCAD was barely holding above 1.3100. The pair was still in the doldrums following a steep decline from its late-December high of 1.3665 and it appeared the bears had no intention of leaving. But in order to confirm their ambitions to drag USDCAD even lower, they first had to deal with the…

Read More »

EURUSD Reversal Needed “Breathing Space”

EURUSD plunged below 1.1260 earlier today. The pair has been steadily declining during the last twelve months and the latest drop suggests a new low is very likely to be reached soon. But it wasn’t all that clear two weeks ago, when the Euro was hovering around 1.1400 against the U.S. dollar. Then the Elliott…

Read More »

A Month Ahead of USDCAD ‘s Bullish Reversal

USDCAD finished 2018 in a positive mood. The pair reached 1.3665 on the last day of last year, but 2019 has not been so generous to the bulls so far. By February 1st, the rate was down to 1.3069, losing over 4.3% in just a month. But let’s take a step back and see where…

Read More »

EURNZD: Is February Going to Mimic December?

It was November 30th, 2018, when we last talked about EURNZD. The pair was trading near 1.6570, following a sharp selloff from as high as 1.7929 in less than two months. After such a huge and fast decline, traders were understandably very pessimistic about the pair’s prospects going into December. However, extrapolation is a dangerous…

Read More »

More analyses