Today we will talk about USDMXN pair, in which we see quite clear bearish pattern from Elliott wave perspective.
Looking at the daily chart, we can see a nice three-wave W-X-Y corrective rally within a higher degree wave (IV) and correction looks to be completed after recent sharp decline, which looks to be unfolding five waves down from the highs in the 4-hour chart.
Five waves down from the highs indicate that market found the resistance and it's turning back to bearish mode, ideally back to lows for a higher degree wave (V). So, watch out for more weakness in the first half of 2022, we will just have to be aware of short-term a-b-c corrective pullback within downtrend.
The main reason for a potential pullback within an a-b-c corrective recovery could be strong resistance on Crude oil, so if Crude suddenly slips following stock market sell-off, then USDMXN could face some rally, but probably temporary only with resistance in the 20.75 - 21.35 zone.
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I think your Primary W is a Primary A, and that the current swing down is a Intermediate (C) in an Ending Diagonal, thus completing Primary B. VIX spike will push Indices down and give the almighty $ the power of attorney.
VIX spike will push Indices down and give the almighty $ the power of attorney.
I see a last dip and then spike to the up-side...