Quotes from Societe Generale Cross Asset Research:
-BRL/MXN gave a break below a multiyear upward channel back in 2012 after completing impulsive up move from an Elliot standpoint and confirmed reversal to downtrend.
-Since then it has undergone a steady correction and is now re-testing 2008 lows of 5.17/5.10 which also happens to be the 38.2% retracement (log scale) of 2002-2011 up move and the lower limit of a descending channel since 2013 (weekly).
-Monthly RSI is diverging positively suggesting possibility of a recovery. Only a definite close below 5.17/5.10 will mean next leg of downtrend towards 4.58. A rebound looks plausible towards graphical resistance of 5.33, a break above which will mean possibility of an extended recovery towards 5.60.
