- USD/MXN stalls near key long-term Fib retracement
- Important turn window this week
Unfamiliar with Gann Square Root Relationships? Learn more about them HERE.
There is a nice convergence of cyclical timing relationships this week in USD/MXN that has us on the lookout for some kind of reversal in the exchange rate. The price action thus far has been uninspiring, though yesterday’s brief spike above and then close below the critical 13.5800 61.8% retracement of the 2012/2013 range is a clear initial sign of fatigue. A momentum divergence has been developing for several weeks on the daily and with sentiment still near negative extremes (DSI=15% MXN bulls) the rate seems susceptible to a counter-trend decline. A close today (or early next week at the latest) sub 13.5000 is needed to confirm that a tradable high is indeed place. A close next week above the 13.5800 Fib level or a move through yesterday’s intraday high near 13.6700 would invalidate the near-term negative cyclical potential and refocus our attention higher in USD/MXN.
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USD/MXN Daily Chart: October 17, 2014
Charts Created using Marketscope – Prepared by Kristian Kerr
Key Event Risk in the Week Ahead:
LEVELS TO WATCH
Resistance: 13.5800 (Fibonacci), 13.6700 (Week-to-Date high)
Support: 13.500 (Psychological), 13.4100 (Fibonacci)
Strategy: Sell USD/MXN
Entry: Sell USD/MXN on a close under 13.5000
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
To contact Kristian, e-mail firstname.lastname@example.org. Follow me on Twitter at@KKerrFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.