Dollar vs Mexican Peso Price Outlook: USD/MXN Breakout Brewing
Mexican Peso Technical Price Outlook: USD/MXN Near-term Trade Levels
- Mexican Peso updated technical trade levels – Daily & Intraday Charts
- USD/MXN trading at near-term support into the start of the week
- Risk for topside exhaustion ahead of 22.8178– critical support 22.1495
The US Dollar is unchanged against the Mexican Peso early in the week with USD/MXN trading just above near-term technical support. Price has continued to trade within the confines of a multi-week descending pattern and rebounds may be limited while within this formation. These are the updated targets and invalidation levels that matter on the USD/MXN technical price charts. Review my latest Weekly 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 rebounded off key near-term support and to, “be on the lookout for possible topside exhaustion near downtrend resistance IF price is indeed heading lower,” with, “22.8176 & 22.9425 – both levels of interest.” The recovery registered a high at 22.8983 last week before faltering with the subsequent pullback trading just above median-line support early in the week.
Critical support remains at the 2017 swing high / 61.8% retracement at 22.0376/1350 – note that this threshold also defines the July opening-range lows and a break / close below is needed to mark resumption of the broader downtrend. Daily resistance stands at 22.8178 backed by the monthly open at 22.9773- broader bearish invalidation steady at 23.1089.
Mexican Peso Price Chart – USD/MXN 120min
Notes: A closer look at Peso price action shows USD/MXN trading within the confines of a descending pitchfork formation extending off the June highs. A reversal off the upper parallel on Friday has price trading at near-term support into the start of the week at 22.4005/4378. Initial resistance stands with the upper parallel with a break lower from here exposing the 61.8% Fibonacci extension at 22.2322 and confluence support at 22.1495/1348- look for a larger reaction there IF reached.
Bottom line: USD/MXN is trading at near-term support early in the week. From a trading standpoint, look for topside exhaustion ahead of the upper parallel IF price is indeed heading lower with a break below the 22.1495 needed to fuel the next leg lower in price. Ultimately, a breach above the July opening-range highs would be needed to shift the broader focus back to the long-side.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
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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.