Top Trade Idea 2020: USD/MXN Set Up for a Volatility Breakout; Good Omen for Dollar, FX Vol
USD/MXN is setting itself for a major breakout in volatility, and of course with it a large price moves once the breakout sorts itself out, clean or not. At the end of 2019, as USD/MXN narrowed towards the apex of a three-year symmetrical triangle it started to break down, but not fully confirm the breach.
USD/MXN Weekly Chart (On the cusp of a big vol breakout)
The long-term trend, and I do mean long-term (as in 40+ years), is up, which suggests that the resolution could still be on the upside. However, that doesn’t mean we won’t see the bearish break in December grows legs first before reversing back higher. These patterns can be tricky at first.
---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.