USD/MXN – Dollar Holding Well Vs. Mexican Peso, Rally Brewing?
- USD/MXN trend is pointed lower, but may change
- Watch 21.50 on further weakness, trend-line on strength
USD/MXN trend is pointed lower, but may change
USD/MXN has been holding up relatively well during the dollar down-draft of late, actually in general emerging market currencies have been relatively weak versus USD. It’s the developed market currencies that have been on a run. What does this mean for USD/MXN?
Despite the recent breakdown from a descending wedge, a false-break could be in the works with a rally on its way. A break above the upper parallel off the April high will be needed to nullify the wedge-break and cross important resistance.
Should we see a strong closing candle above ~22.50 then a reversal higher may very well be in the works. The first level of significant resistance in this scenario will be the April low and June high in the vicinity of 22.22/27.
But before we can discuss higher prices, resistance should be trusted until broken. For as long as it stays contained by resistance the path of least resistance is neutral to lower. If USD/MXN trades below 21.85, the weekly low, then we will be looking to the June low at 21.46 as the next level of support, followed by the 200-day at 21.15 which is in near confluence with the 2018 high at 20.96.
USD/MXN Daily Chart (wedge-break, testing resistance)
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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.