USD/MXN – US Dollar Nearing a Tipping Point vs Mexican Peso
What's on this page
- USD/MXN sideways meander keeps it in play for continuation
- Support levels need to hold on any dives lower from here
USD/MXN sideways meander keeps it in play for continuation
USD/MXN hasn’t been a very exciting place for traders to be, as it continues to digest the incredible run-up during the first quarter. At some point though that will change as a breakout to either side becomes virtually inevitable.
At this time the upside still looks appears to be the most likely path with the trend pointed higher and sellers having a hard time reversing the uptrend (similarly to USD/ZAR). But downside levels are going to need to hold. Just as is the case with ZAR, MXN is coiling to towards a potential apex of a wedge.
If price dips below 23.64 then the wedge scenario comes off the board, but it doesn’t mean the pair will fall apart. The floor is seen as 22.83, a swing-low created in March. A break below that point would warrant a cautious, if not outright bearish outlook.
In the event support continues to hold, then a break outside of the wedge is needed to get USD/MXN rolling higher again. The size of the congestion pattern implies we could see a move to 29/30 on the next run. For now, traders will likely be best served awaiting better directional cues and avoiding getting chopped up amidst the range.
USD/MXN Daily Chart (congestion pattern continues…)
Resources for Forex Traders
Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.
---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.