USD/MXN Refer to Previous Idea LinkedThis idea is for demonstration and educational purposes and does not constitute a signal, but it is a study, as we study market structure and price action.
From this view over the past month, since mid-October 2019 and as we study USD/MXN we see evidence of reversal of trend forming in the market. If you refer to the post I shared a week or two ago (see USD/MXN idea linked below), you will see the progress of how we have come in terms of price action. Keep in mind that the market does not move in a straight line. An idea for today may not play out until days or weeks later. The market still will do what it does in terms of forming market structure, afterwhich we can look for longer term trades. The trade ideas often take time to play out. It's best that we watch and study and enter at optimal positions where we can take advantage of high volatility.
Now for today, What we saw today in terms of price action was a sharp impulse, towards the target I noted in the previous set up (see linked idea below). We know that the bulls are definitely present. Afterwards today we saw a sharp rejection, which could very well be a re-test to the previous price area, which is very common that after the impulse, we see a correction, and then a continuation, which confirms the new trend. After the re-test now we watch for continuation. Just like the USDZAR idea I shared yesterday (refer to USD/ZAR idea below) this could be very similar price action..Could be but not necessarily. It all depends on what actually happens. We could be getting what may be the same price action and then followed by a bullish run. As we look from zone to zone, I would hope to see price reach the first and second key zones as noted, which would make for a nice swing trade idea of almost 400 pips. Of course this idea does not mean pull the trigger. Study your confluences and wait for confirmation that bullish price action will continue before considering a buy. Remember, this does not have to play out, but it is simply an idea.. If you enter this trade at any time, you do so at your own risk. Always use proper risk management.
I will also note that USD/ZAR and USD/MXN are not related in any way or correlated. It just so happens that for demonstration purposes I am comparing these two based on similar price action in the recent past. They are both emerging market currencies however.
Please like and offer your feedback and feel free to follow me on Instagram and Facebook!
