USDMXN bears may resume lower within wave (V) after a running triangle corrective pattern in wave (IV) by Elliott Wave theory.
USDMXN has been trading lower for the last three years or so and ideally, it will reach even lower prcies later this year, after the completion of a corrective price action on a daily time frame. We are talking about wave (IV) which can be more complex and sideways after a reversal from a new low and broken downward channel. There is a chance that price is in wave (IV) triangle so more weakness can show up after subwave A-B-C-D-E are finished. So be aware of more consolidation within big range, as subwave E can be still missing.
A triangle appears to reflect a balance of forces, causing a sideways movement that is usually associated with decreasing volume and volatility. The triangle pattern contains five overlapping waves that subdivide 3-3-3-3-3 and are labeled A-B-C-D-E. The running triangle is a region of horizontal price movement, a consolidation of a prior move, and it is composed of “threes.” That means each of the A-B-C-D-E waves have three subwaves. The triangle pattern is generally categorized as a continuation pattern, meaning that after the pattern completes, it’s assumed that the price will continue in the trend direction it was moving before the pattern appeared. However, triangles also indicate that the final leg is coming before a reversal and that’s why triangles are labeled in wave B, wave X or wave 4.
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