USD/MXN Takes Off to All Time High, Will US Dollar Stop its Rally vs Mexican Peso?
USD vs MXN Technical Forecast
- Soars to all time high
- Will bulls keep controlling the price action?
USD/MXN – Bullish Market
On Thursday, USD/MXN took off to all time high at 22.990 then retreated after, as some bulls seemed to cut back. Yet, on Friday the market closed the weekly candlestick in the green with 9.0% gain.
Alongside that, the Relative Strength Index (RSI) had crossed above 70 and remained in overbought area, highlighting a powerful uptrend momentum.
USD/MXN DAILY PRICE CHART (Oct 1, 2018 – Mar 18, 2020) Zoomed Out
USD/MXN DAILY PRICE CHART (Oct 7– MAr 18, 2020) Zoomed In
From the daily chart, we noticed that last week USD/MXN opened with a gap to the upside highlighting unfinished uptrend move as discussed in our last update. Later on, the price moved through the market trading zones. Today, the market has tested a higher trading zone 23.122- 23.791.
Thus, a close above the low end of the zone could encourage bulls to push towards the high end. Further close above the that level opens the door for more bullishness towards 24.872. That said, the psychological resistance area marked on the chart (zoomed in) should be considered.
On the flip-side, any close below the low end of the zone reflects bull’s hesitation. This might lead some of them to exit the market allowing USDMXN to fall towards 23.122. Further close below that level, could send the pair even lower towards 22.041. In that scenario, the daily support levels underscored on the chart should be watched closely as some traders may exit/enter the market around these points.
USD/MXN four hour PRICE CHART (Mar 9 – Mar 18, 2020)
Looking at the four- hour chart, we notice that on March 12 USD/MXN resumed bullish price action creating higher highs with higher lows. At the start of this week, the uptrend move has accelerated further. Nevertheless, any violation to the uptrend line originated from the March 10 low would be considered a bearish signal.
Thus, a break below 22.993 could send USDMXN towards 22.130. Although, the daily support level underlined on the chart should be kept in focus. In turn, any break above 24.400 might cause a further rally towards 24.600. Yet, the physiological resistance level printed on the chart should be watched closely.
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.