USD/MXN Sharply Rallies on US Election Results
09 Nov 2016 04:16, GMTUSD/MXN has been labeled the ‘Trump trade” for the past few months and today it is living up to its name increasing 11% since the daily close.
With some large electoral states leaning towards Donald Trump, USD/MXN has swung violently and trended higher currently up over 11% over the past 5 hours.
Though it is not unusual for single share stocks to gap large amounts, it is unusual for currencies to move 10% in a day, let alone in a few hours. However, this is 2016 which has seen the Chicago Cubs win their first World Series in 108 years and the United Kingdom vote for Brexit.
From a technical perspective, it is better to wait for pull backs and see how price behaves near levels where a bounce may ensue. The first level to keep an eye on would be the September 2016 high of 19.90. This may offer support should a correction develop.
Liquidity is likely to be thin on trading USD/MXN during the overnight hours. Perhaps other proxy’s for risk aversion may be warranted like USD/JPY, EUR/JPY, and GBP/JPY.
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