Mexican Peso (USD/MXN) Price, Analysis and Chart:
USD/MXN Eyes a Fresh Six-Week Low
The latest Federal Reserve policy decision and the first look at Mexican Q2 GDP will steer USD/MXN in the near-term, with both sides of the pair getting a strong fundamental driver. The Fed is expected to leave all policy levers untouched but deliver a dovish message, while Mexican GDP figures, released on Thursday, will likely show a sharp contraction in economic activity in the second quarter.
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The technical backdrop for USD/MXN still suggests lower prices ahead, but with one notable caveat. The downturn since the start of this month has been slow and consistent with last Friday’s fall below both the 20- and 50-day moving averages adding momentum to the move. This move saw the pair break the 50% Fibonacci retracement level at 22.153 and as such leaves a cluster of three potential supportive levels at risk. The 200-dma sits at 21.52, the mid-June multi-month low is at 21.424 and the 61.8% Fibonacci retracement stands at 21.296. The caveat noted above, and an indicator that may temper any short-term move lower, is the extreme oversold condition of the pair highlighted by the Commodity Channel Indicator (CCI). A cluster of old lows, Monday’s high and the 20- and 50-dmas up to 22.400 may prove difficult to break in the short-term.
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USD/MXN Daily Price Chart (December 2019 – July 29, 2020)
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.
