USDMXN has reached the projected resistance target for wave C of a regular ABC flat correction and is now turning sharply lower with an impulsive decline. This strong reversal suggests that sellers have regained control, shifting the short-term outlook back to the downside. While the broader bearish move appears to be underway, traders should still be aware of short-term corrective pullbacks that may interrupt the decline.
From an Elliott Wave perspective, a regular flat correction follows a 3-3-5 structure. Wave A unfolds as a three-wave correction, wave B also forms a three-wave move and typically retraces close to or slightly beyond the start of wave A, while wave C develops as a five-wave impulse that often terminates near key Fibonacci resistance levels. Once wave C is complete and an impulsive reversal appears, it frequently signals that the dominant trend is ready to resume.
With wave C now likely complete and bearish momentum accelerating, the technical outlook favors additional downside in the sessions ahead.
Highlights:
- USDMXN reached the projected resistance for wave C of a regular 3-3-5 flat correction.
- A sharp impulsive reversal suggests bears have regained control.
- Regular flat corrections consist of a 3-3-5 Elliott Wave structure (A-B-C).
- Wave C often completes at Fibonacci resistance before the dominant trend resumes.
- Watch for further downside, while allowing for short-term corrective pullbacks along the way.
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