USD/MXN Price: US Dollar vs Mexican Peso – Unfinished Uptrend Momentum
USD vs MXN Technical Forecast
- Bulls eased up, yet still in charge
- Levels and signals to monitor
USD/MXN – Bulls Pullback
On Friday, USD/MXN peaked at 19.895- its highest level in nearly six months. The market retreated after, as some bulls seemed to cut back. Yet, the pair closed the weekly candlestick in the green with 3.6% gain. On Monday, more bulls eased up allowing the price to fall further.
Alongside that, the Relative Strength Index (RSI) abandoned overbought territory highlighting weaker uptrend momentum.
USD/MXN DAILY PRICE CHART (AUG 1, 2018 – Mar 4, 2020) Zoomed Out
USD/MXN DAILY PRICE CHART (Nov 7– MAr 4, 2020) Zoomed In
From the daily chart, we noticed that last week USD/MXN opened with a breakaway gap to the upside signalling bear’s hesitation. Later, bulls took charge and rallied the market to multi- month high.
This week, the market opened with another upward gap (runaway gap) signalling that bullish momentum is far from finished. Yesterday, the price rebounded from the low end of current trading zone, 19.153 – 19.471 then closed with a long legged Doji pattern, reflecting the market indecision at this stage.
A close below the low end of the zone indicates bull’s reluctance. This could lead some of them to exit the market sending the price towards 18.802. Further close below this level opens the door for bears to take over and possibly press towards 18.404. In that scenario, the daily and weekly support levels and area marked on the chart (zoomed in) should be kept in focus, as some traders may exit/join the market around these points.
In turn, a close above the high end of the zone may cause a rally towards 19.862. Further close above that level could mean more bullishness towards 20.258. Having said that, the daily and weekly resistance levels underscored on the chart should be watched closely.
USD/MXN four hour PRICE CHART (Jan 6 – Mar 4, 2020)
Looking at the four- hour chart, we notice that on Monday USD/MXN broke below the neckline of double top pattern located at 18.481, eyeing a test of 19.090. The price rebounded from the low end of current trading zone discussed above on the daily chart then rallied. Yet, failed to negate the pattern as stayed below the neckline level signalling bulls’ hesitation.
Thus, a break above 19.520 could lead the pair towards 19.642. Although, the daily resistance level underlined on the chart should be considered. On the flip-side, a break below 19.127 could send USDMXN towards 19.027. Nonetheless, the support level printed on the chart would be worth monitoring.
See the chart to figure out more about key levels to monitor in a further bullish/bearish move.
Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.