Dollar vs Mexican Peso Technical Outlook: USD/MXN Recovery at Risk
Mexican Peso Technical Price Outlook: USD/MXN Near-term Trade Levels
- Mexican Peso updated technical trade levels – Weekly & Daily Charts
- USD/MXN rebound falters- to make first test of support
- Looking for guidance on a move lower- broader recovery vulnerable sub-23.2710
The US Dollar has pared a portion of the losses sustained against the Mexican Peso last month but the recovery may be short lived. Last week’s USD/MXN rally is making the first test of support and we’re looking for a reaction just lower for guidance. These are the updated targets and invalidation levels that matter on the USD/MXN technical price charts. Review my latest Strategy Webinar for an in-depth breakdown of this Peso trade setup and more.
Mexican Peso Price Chart – USD/MXN Daily
Technical Outlook: In my last Mexican Peso Price Outlook we noted that USD/MXN had broken, “below a key support pivot in price and leaves the pair vulnerable to further losses heading into June trade.” Price fell more than 3% into the open of the month before posting an outside-day reversal off the lows last week- that advance broke through monthly open resistance and USD/MXN now needs to stabilize above a key support zone at 22.0376/1503 for the reversal to remain viable in the days ahead. Key resistance now eyed at the 38.2% retracement of the April decline / 75% parallel at 23.1089. A pivot lower keeps the focus on confluence Fibonacci support at 21.23165/2942.
Mexican Peso Price Chart – USD/MXN 120min
Notes: A closer look at Peso price action shows recent recovery in USD/MXN – a reversal of more than 2.4% on Friday risks a deeper pullback here but losses should be governed by upcoming support targets IF price is heading higher. Weekly / Monthly open support at 22.1495/1942 backed by the 100% extension / 61.8% retracement at 21.9859-22.0257– a break / close below this threshold would be needed to mark resumption with such a scenario exposing the monthly lows at 21.4708 and 21.23165/2942. Topside resistance objectives steady at 23.1089 and the April low at 23.27810- a topside breach / close above would be needed to suggest a larger recovery is underway.
Bottom line: The USD/MXN recovery is facing the first test of support on this pullback. From a trading standpoint, look for downside exhaustion ahead of 21.9859 IF price is indeed heading higher with a breach above the April lows needed to suggest a mores significant low was registered this month. A pivot lower would shift the focus back towards the monthly lows.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
Key US / Mexico Data Releases
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--- Written by Michael Boutros, Technical Strategist with DailyFX
Follow Michael on Twitter @MBForex
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.