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US Dollar Outlook vs Emerging Market Currencies: USD/MXN, USD/KRW, USD/ZAR

US Dollar Outlook vs Emerging Market Currencies: USD/MXN, USD/KRW, USD/ZAR

Dimitri Zabelin, Analyst

US Dollar, Mexican Peso, South Korean Won,South African Rand – TALKING POINTS

  • USD/MXN appears to be forming a short-term Bull Flag continuation pattern
  • USD/KRW outlook bullish after the pair broke above several resistance layers
  • USD/ZAR is challenging prior support channel but failure may lead to pullback

USD/MXN Analysis

USD/MXN rose over 30 percent to an all-time high at around 25.36 before retreating and subsequently shattering the multi-week uptrend (gold trend line). However, the pair now appears to be forming a short-term continuation pattern known as a Bull Flag. USD/MXN looks like it is in the congestive stage as it coils up before springing higher and resuming the prior uptrend. The potential rise may be proportional to the ascent leading up to the digestive interim.

USD/MXN – Daily Chart

Chart showing USD/MXN

USD/MXN chart created using TradingView

USD/KRW Forecast

USD/KRW may be on the verge of a bullish spike after it broke out of a steep, month-long descending resistance channel (gold parallel lines) and an inflection point at 1219.7 (white-dotted line). If the move is met with follow-through, the target may be the 11-year swing-high at 1272.00 (purple-dotted line) where the pair previously stalled before aggressively retreating.

USD/KRW – Daily Chart

Chart showing USD/KRW

USD/KRW chart created using TradingView

USD/ZAR Outlook

USD/ZAR has risen a little over 22 percent since the start of the uptrend (gold trend line) but has recently broken below it as part of a broad retreat from its all-time high at 19.0340. Following the cool-off period, the pair appears to be making an attempt at re-saddling the rising support channel after bouncing back just above the 17.8289 inflection point. Failure to re-mount the slope of appreciation could see USD/ZAR retest prior support.

USD/ZAR – Daily Chart

Chart showing USD/ZAR

USD/ZAR chart created using TradingView


--- Written by Dimitri Zabelin, Currency Analyst for

To contact Dimitri, use the comments section below or @ZabelinDimitriTwitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.