USDMXN 1D TRIANGLE BREAKOUTTriangles are repeatable trading chart patterns.
Triangles are consolidation chart patterns that can breakout either direction.
Each chart pattern will have defining trendlines of the support/resistance levels creating the pattern.
What ever time frame you are trading this chart pattern, wait for a candle close outside of the trendline in the direction of the breakout candle. (Our time frame preference is the Daily chart).
Add volume indicator - Volume is the amount of $ that went into a particular candle or in Forex the # of trades that took place.
Add ATR indicator - Volatility is the amount of price movement that occurred. Use the ATR to measure the price movement.
When you see descending Volume bars and descending ATR line (which indicates volatility) this shows
a dis-interest in traders to invest in this pair creating consolidation which creates the chart pattern.
Trade Management after there is a breakout candle close.
1 - Position size (compare volume bar to volume ma line).
a - Breakout candle must be 100% of average volume for a full position size.
b - If 75% of average volume then ½ position size. (To find 75% of Volume
look at the charts volume settings – divide smaller # into larger # = 75%+)
2 - Enter two trades.
3 - SL for both trades will be 1.5 x ATR.
4 - 1st trade TP will be 1 x ATR.
5 - No TP on 2nd trade – letting profit run and adjusting SL to follow price.
6 - When 1st TP hit – move 2nd trade SL to breakeven.
7 - Adjust the 2nd trade SL to follow price.
*8 – After Breakout candle – if price closes back into chart pattern close trade
*9 - When breakout candle is more than 1 ATR from breakout candle open.
a - Enter 1st trade at candle close with ½ position size.
b - Enter 2nd trade with a pending limit order that is 1 ATR of breakout candle open.
c – Price should pullback to that pending limit order for 2nd trade.
d – If Price returns back into chart pattern close trade before SL is hit.
USDMXN
USDMXN : Things to KnowPredicting an actual target after a move like that is almost impossible.
This pattern is highly likely to produce a continuation of the price action leading up into it; it’s a classic triangle.
This fact we have just examined, in a normal situation would be enough to say easily, well now is another time to long, on a breakout play.
The triangle appears most valid on the daily; as although the wick violates the triangle, the reaction is quite violent;
The triangle at this point is in the final stages of completion. A breakout or breakdown is to be expected before April is over.
The strength behind the US Dollar is largely panic driven and therefore extremely prone to a hard fall
All markets clearly aware some type of tomfoolery is going on; at some level.
Caution is to be taken with MXN. It ranges hard on the daily. Good luck.
Long USD/MXTechnical:
USD/MXN broke out of a massive symmetrical triangle today and is retesting the top for confirmation....The Ichi cloud is providing support (not shown here in order to not make the chart too busy....run it yourself and see).
Fundamental:
With the debacle in oil prices today (WTI may futures contracts traded for negative $37, yes, negative, adn June contracts slid $4 to $20 a barrel) USD/MXN is set to soar! We are in price discovery mode right now with very little resistance overhead and no price history above $25.78. This has the potential for huge returns
Global USD valueStrength of USD versus currencies of EU, Japan, China, India, Russia, Mexico, Brasil, Saudi Arabia, Turkey, South Korea.
There had been a cosmic demand for dollar but as COVID hit USA from April 6 we saw a breakdown.
Now we are at major support, on the monthly balance point, from which a push up is likely but not guaranteed.
The area between CAMS1 and CAMR1 is regarded as neutral market.
A break above those levels will establish a bear or bull market.
Demark trendline needs to connect 2 corresponding TD N points. While here we see disproportion (bottom TD point is only N1) so I dont give much credence to that trendline.
If both USD and EUR will keep falling we will see a range on EURUSD.
The question is which one will fall faster. But now we see a pivot stop on USD fall but EUR is likely to keep falling on Monday as it is below April value zone.
Global EURO value index (see my previous post) started to exhibit great daily instability since early March (each days candle has long wigs either way).
I excluded CAD as its economy is much intercorporated with the US one and GBP, CHF being a EURO clones. But still inclusion of those doesnt change the picture much.
Post-breakout pullback into FIB zoneI have been taking a look into dollar index and a strong push up is very likely next 2 weeks,
considering all the conditions of what happened:
1. Breakout of descending daily supply trendline (breakout candle - strong bullish, second post breakout candle strong bullish)
2. Trendline breakout retested (important factor: price stayed above the trendline after the retest - uptrending confirmed)
3. Classic pullback into Fib zone (50-61) and retest of last month roof R4 (March breakout level).
4. Demark breakout slingshot projection gives target near April R4 confirming the breakout and April camarilla levels. Also, April resistance CAMR3 coincides with 78 fib level.
In the Fib zone we do have untested missed monthly pivot - the question is if price is gonna test it? But then again - missed pivots mark the starts of strong trends.
At any case, push back under the trendline does not make much sense.