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USD/MXN – US Dollar In a Tough Spot vs Mexican Peso

USD/MXN – US Dollar In a Tough Spot vs Mexican Peso

Paul Robinson, Strategist

USD/MXN Highlights:

  • USD/MXN decline puts it into oversold territory, but..
  • Not much support to lean against for bullish positioning

USD/MXN in limbo after sell-off

USD/MXN has continued to trade lower in-line with the rest of the Dollar spectrum from emerging market to developed market currencies rallying sharply against USD. While the trend looks extended across the space in the short-term, fading may prove difficult as momentum has been so strong.

USD/MXN currently doesn’t have a good deal of support to lean on, but yet may turn higher in the sessions ahead as it alleviates short-term oversold conditions. Looking higher it seems unlikely for now we will see a move develop above 23.

On the downside the 2018 high just a shade under 21 may soon come into focus. The 200-day is a bit of a distance from here, requiring price to decline to 20.58. Traders looking for a short may want to wait for a congestion pattern before taking a continuation trade.

On the long-side, it is also difficult at the moment with a meaningful low having not yet bee forged. All-in-all, sitting on the sidelines may be a prudent move until further clarity presents itself.

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USD/MXN Daily Chart (stuck in the middle at the moment)

USD/MXN daily chart

USD/MXN Chart by TradingView

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---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX

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