USD/MXN – Chart Pattern Could Set USD up to Move Soon vs Peso
- USD/MXN coiling up, creating a wedge pattern
- Looking lower versus higher at the moment, breakout pending
USD/MXN coiling up, creating a wedge pattern
USD/MXN has been chopping around the past few couple of months, and on a couple of occasions it looked like it wanted to provide signaling on a direction only to fail to follow through. That may continue to be the case for a little bit longer, but a solid-looking wedge formation may be in the works.
If a symmetrical pattern is to come to fruition it may take until the beginning of next month before an apex is reached and the directional bias is determined. At the moment the general bias is looking down given generally poor price action, but that could change.
For traders looking at short-term scalps there may be some opportunity right now, but it will be important to continue to be nimble with limited expectations until we can get a good breakout pattern to reach maturity.
In addition to the top and bottom-side trend-lines of the wedge formation running off the June low and high points, there is short-term support at 21.85 and resistance at 22.90. Either of these levels will need to be breached if any momentum is to come in to USD/MXN.
Later, should a solid-looking wedge develop and head into breakout mode, we’ll look at the operating trading bias and other important levels and potential targets.
USD/MXN Daily Chart (wedge could be maturing…)
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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.