Dollar vs Mexican Peso Price Outlook: USD/MXN Range Contraction
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Mexican Peso Technical Price Outlook: USD/MXN Near-term Trade Levels
- Mexican Peso updated technical trade levels – Daily & Intraday Charts
- USD/MXN contracting into July opening-range
- Risk for downside exhaustion above 22.4005– key near-term resistance 23.0007
The US Dollar is fractionally higher against the Mexican Peso early in the week with USD/MXN rallying 0.5% into the open. Price has continued to consolidate within the monthly range and we’re looking for a breakout in the days ahead to offer guidance. 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 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.” The dollar registered a low at 22.2545 before rebounding off median-line support with price continuing to contract into the July opening-range.
Initial daily resistance stands with the 61.8% retracement of the late-June decline at 22.8179 with a critical resistance confluence just higher at 22.9773-23.1089- a region defined by the objective monthly open, the 100% extension of the most recent advance and the 38.2% retracement of the decline off the record highs. A breach / close above this threshodl would be needed to shift the focus higher again towards 23.6189. Critical support steady at 22.0376/1503 – weakness beyond this level would mark resumption of the broader downtrend.
Mexican Peso Price Chart – USD/MXN 120min
Notes: A closer look at Peso price action shows USD/MXN trading within the confines of an ascending pitchfork formation extending off the July lows. A breakout & retest of the late-June trendline fueled a rally into confluence resistance today at the 61.8% extension / 25% parallel at 22.7160. Weekly open support now 22.5418 with near-term bullish invalidation set to 22.4005/4378. A breach higher from here keeps the focus on 22.8176 backed by 22.6973-23.0007.
Bottom line: USD/MXN is contracting within the monthly opening-range and we’re looking for the breakout to offer guidance. From a trading standpoint, look for support / downside exhaustion ahead of 22.4005 IF price is heading higher with a breach above 22.8176 needed to keep the long-bias viable.
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.