Dollar Outlook vs Mexican Peso, South African Rand, South Korean Won
US Dollar, Mexican Peso, South African Rand, South Korean Won – TALKING POINTS
- USD/MXN could be showing signs of bottoming out after bullish pattern was invalidated
- USD/ZAR selloff could come to a halt ahead of key support after over-11 percent decline
- USD/KRW rejected at key resistance and has broken vital uptrend – what happens next?
USD/MXN has fallen over 8 percent after the pair broke through what at the time appeared to be the formation of a bullish pattern known as a Pennant. USD/MXN is hovering just above a floor at 21.4134, a possible sign of downside exhaustion. If sellers back off and are replaced with an influx of buyers looking to find a bottom, it could help push the pair higher until it hits former support-turned-resistance at 23.2345.
USD/MXN – Daily Chart
USD/MXN chart created using TradingView
Since mid-April, USD/ZAR has fallen over 11 percent and has ripped up two floors at 17.8289 and 17.1808 along its descent. The pair may now attempt to retest support at 16.5272, which if broken could inspire further liquidation. Having said that, if UZD/ZAR does not close another day below recently-punctured support, a turnaround may ensue and the pair may retest 17.8989.
USD/ZAR chart created using TradingView
While selling pressure in USD/MXN and USD/ZAR may start letting up, USD/KRW’s decline may accelerate. The pair just recently broke a five-month uptrend after being rejected at resistance at 1240.65. USD/KRW may now test support at 1210.41, which if cleared opens the door to further liquidation. In this scenario, selling pressure may start alleviating close to the floor at 1190.87.
USD/KRW chart created using TradingView
--- Written by Dimitri Zabelin, Currency Analyst for DailyFX.com
To contact Dimitri, use the comments section below or @ZabelinDimitri Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.