News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
US Dollar vs Mexican Peso Outlook: USD/MXN Remains Brittle After Sharp Sell-Off

US Dollar vs Mexican Peso Outlook: USD/MXN Remains Brittle After Sharp Sell-Off

Nick Cawley, Strategist

US Dollar vs. Mexican Peso (USD/MXN) Price, Analysis and Chart:

  • The steep USD/MXN sell-off finds support but will it hold?
  • USD/MXN may consolidate as pair remain oversold.

USD/MXN – Target Made, Time to Consolidate and Re-Think

The sell-off in USD/MXN continues and touched a near three-month low on Tuesday as the Mexican Peso continued to gain ground. Last week’s USD/MXN report identified the 50% Fibonacci retracement level at 22.153 as the next level of support and this level traded yesterday, just, before a very minor rebound.

US Dollar vs Mexican Peso Outlook: USD/MXN Pressing Against Multi-Week Lows

The one-way price action for USD/MXN may now look to consolidate, despite another lower high being printed today. So far today’s daily candle has failed to make a lower low for the first time in two weeks, excluding Sunday’s candles, and this coupled with support from the 50% Fib retracement at 22.153 may see the pair pause before the next move. The CCI indicator remains in oversold territory and suggests a level of short-term support as positioning looks to balance out.

The strength of the sell-off may mean that any upside move will be capped and it is difficult looking at the chart to suggest that the pair will break back above 23.00/23.009 – big figure and 38.2% Fib retracement - in the short-term. If USD/MXN trades below yesterday’s multi-week low at 22.10, then the series of lower lows will remain in place, leaving three prior lows around 21.350 and the 61.8% Fibonacci retracement level at 21.296 as the next levels of support.

Data to watch out for include today’s Mexican unemployment report (12:00 GMT) and the Fed Beige Book (19:00 GMT), Thursday’s US Q2 GDP 2nd estimate (13:30 GMT) and Mexico’s MPC minutes (16:00 GMT) and Friday’s US core PCE (13:30 GMT) and Michigan consumer sentiment (15:00 GMT).

If you are interested in technical analysis, see our updated Education Centre for a comprehensive range of indicators and analytical articles.

USD/MXN Daily Price Chart (November 2019 – May 27, 2020)

US Dollar vs Mexican Peso Outlook: USD/MXN Remains Brittle After Sharp Sell-Off

Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

What is your view on USD/MXN – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES