USD/MXN Highlights:
- USD/MXN rallies strongly as stocks got crushed
- A run towards 25 on the table with the momentum
USD/MXN rallies strongly as stocks get crushed
USD/MXN blasted off yesterday after spending most of the past month going lower almost ever single day. It wasn’t just USD/MXN, though, the EM space was quickly beating up on the Dollar, but that trend may be changing given the sharp momentum we just saw.
There wasn’t any major support hit but you don’t need support to have a bottom if the price action demonstrates that a natural floor may have been found. The 4% rally qualifies as the type of price action to suggest a low could be in.
The first area of resistance to work with is the late March swing-low around the 22.83-mark. A close today and strong weekly close will help bolster the near-term prospects. A rally back over 25 where there was significant resistance from March to May could be in the cards soon.
That will be a tough level to get through, but with the long-term trend still pointed higher after coming out of the multi-year wedge, it could very well develop as USD reasserts itself vs the troubled EM currencies. For the bias to turn back lower it may take a little time to take the wind out of the sails here.
USD/MXN Daily Chart (powering off the lows)
USD/MXN Weekly Chart (trend resumption?)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
