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Elliott Wave Analysis: USDMXN Is Forming A Bearish Triangle

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July 14 2021

Hello traders!

We want to share a chart with interesting and known pattern called triangle on USDMXN currency pair.

As you can see, USDMXN is trading sideways since the beginning of 2021. With slow price action and corrective sideways wave structure, we believe it's just a correction within downtrend, ideally a bearish triangle formation within a higher degree wave (IV) that can send the price even lower within wave (V).

Triangles are continuation patterns which consist of five waves A-B-C-D-E and seems like the final wave E can be now in progress, so watch out for a drop back to lows towards 18.x area soon.

It’s also worth to mention that three weeks back the central bank of Mexico (Banxico) hiked the benchmark interest rate by 25 basis points to 4.25%. This seems to be very bullish for MXN across the board and it may last until other banks will start increasing the rates as well. However, a lot of CB seem to be waiting on the FED first. Today, Powell will definitely talk about inflation , but recent retracement on some of the commodities , like Lumber, may give more time to the FED, so they can wait with aggressive taper- talk, possibly till September or maybe even end of the year. Under that situation dollar may face limited upside.
 

Elliott Wave Analysis: USDMXN Is Forming A Bearish Triangle by ew-forecast on TradingView.com



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