USDMXN and AUDJPY Can Turn Lower

Intermediate

I personally like USDMXN and its hourly structure, where I see a completed EW leading diagonal down from 18.9788 level, followed by a possible three-wave retracement that can see limited upside and a reversal near the 18.6825 level.

USDMXN, 1H

USDMXN Chart

An ending diagonal is a powerfull reversal pattern.

  • structure is 3-3-3-3-3
  • a wedge shape within two converging lines
  • wave 4 must trade into a territory of a wave 1
  • appears primarily in the fifth wave position, in the C wave position of A-B- C and in double or triple threes as the final “C” wave
    Wave System

AUDJPY made a five wave decline from January highs, followed by a three-wave pullback which can be now approaching some resistance zones. As we look closely we can see leg C trading near the former swing high of wave 4 at 84.805 where bulls can slow down, and a new turn lower may come into play. All being said, a drop in minor five waves would suggest a completed three-wave setback and more weakness to follow.

AUDJPY, 4H

AUDJPY Chart

Gregor Horvat

Elliot Wave Technical Analyst

Gregor Horvat is based in Slovenia and has been in the Forex market since 2003. He has been working for Capital Forex Group and TheLFB.com.

He is the owner of www.ew-forecast.com, which prov...continued

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