USD vs MXN Technical Forecast
- Bulls pullback from a multi-week high
- USD vs MXN price chart highlights a trend-less move
USD/MXN – Lost Gains
On June 30, USD/MXN rallied to near six-week high at 23.229. However, the price reversed lower and closed the weekly candlestick on Friday with a 2.9% loss.
Last week’s positive news about the coronavirus vaccine combined with a stronger than expected US jobs report reduced demand on safe havens and pressed the US dollar lower.
USD/MXN DAILY PRICE CHART (Sep 1, 2018 – JuLY 8, 2020) Zoomed Out
USD/MXN DAILY PRICE CHART (APRIL 16 – JULY 8, 2020) Zoomed In
In Mid-June, USD/MXN corrected its downside trend and started a sideways move creating lower highs with higher lows. Since then, the market has stuck in the current trading zone 22.041 – 23.315. Last week, the price was rejected on multiple occasions on the 50- day moving average and signaled weaker bulls at this stage.
A close below the low end of the zone indicates that bears could press towards 20.962, and a further close below that level may encourage them to send USDMXN even lower towards 20.260.
On the other hand, a close above the high end of the zone reflects that bulls could push towards 24.437, and a further close above that level may encourage them to extend the rally towards 25.291.
USD/MXN four hour PRICE CHART (JUNE 6 – JULY 8, 2020)
Yesterday, the price U-turned and broke above the downtrend line originated from the June 30 high at 23.229 and produced a bullish signal. Therefore, a break above the downtrend line originated from the 25.782 highlights that the price may trade higher, while a break below the uptrend line originated from the July 6 low at 22.154 means possibly more of the sideways move.
To conclude, a break above 23.616 may trigger a rally towards 24.058 while, a break below 21.723 could send USDMXN towards 20.962.Nonetheless, the daily support and resistance levels underlined on the four-hour chart should be monitored.
Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi
