USDMXN made a clear five-wave drop from 19.913 high, where a higher degree wave C found a top. We labeled this five-wave decline as wave I, the first wave of a bigger bearish cycle, which can resume once the current corrective wave II finds resistance. As we know, wave II is a corrective wave, meaning it will be choppy and overlapping, and ideal in three legs.
In our case, we can see first leg A and second leg B completed, and a current sharp rally from 18.4192 level can be an impulsive wave C, the final leg of a bigger correction, that can see a limited upside near the 18.9776/19.1650 region.
Now taking a closer look at the hourly chart where we can see a nice five-wave recovery to be in progress. Specifically we see the price trading within red wave 3), with its leg 5 searching for a temporary top and resistance, ideally around the 18.892 zone, where Fibonacci projection of 200.0 sits. From there a minimum three-wave retracement can follow as red wave 4).