Dollar vs Mexican Peso Outlook: USD/MXN Plummets to Key Support Zone
Mexican Peso Technical Price Outlook: USD/MXN Near-term Trade Levels
- Mexican Peso updated technical trade levels – Daily & Intraday Charts
- USD/MXN breakdown probing key support zone at 21.2316/2942
- Risk for topside exhaustion sub-22.0895 – key near-term support 20.8377
The US Dollar is down more than 4.4% against the Mexican Peso since the start of the month with USD/MXN now probing a key technical pivot zone. We’re looking for a reaction down here as price approaches near-term downtrend support. These are the updated targets and invalidation levels that matter on the USD/MXN technical price charts. Review my latest Strategy Webinar for an in-depth breakdown of this Peso technical setup and more.
Mexican Peso Price Chart – USD/MXN Daily
Technical Outlook: In my last Mexican Peso Price Outlook we noted that the ”USD/MXN rally is attempting to breach a major technical resistance confluence here- look for possible topside exhaustion on a stretch towards near-term slope resistance.” Price continued to probe downtrend resistance for nearly a week before failing into the close of September trade. A decline of more than 7% off the monthly highs has broken below confluence support at 21.2316/2942 and we’re looking for inflection here.
A hold below this threshold keeps the focus on a key support confluence near channel support at 20.6788- a region defined by the 1.618% Fibonacci extension of the decline off the June highs- look for a larger reaction there IF reached. Bearish invalidation rests at the highlighted region along the upper parallel at the objective October open at 22.0895.
Mexican Peso Price Chart – USD/MXN 120min
Notes: A closer look at Peso price action shows USD/MXN trading within the confines of an descending pitchfork formation extending off the late-September highs with the pair testing the 21.2316/2942 resistance range early in the session. Initial support now eyed at 21.0499 backed by the lower parallel / September lows at 20.8377 and 20.6788. A topside breach from here would risk a rebound towards 21.5488 with a close above the upper parallel needed to shift the near-term focus higher again.
Bottom line: The USD/MXN sell-off is now testing a break of a key pivot zone we’ve been tracking at 21.2316/2942 – from a trading standpoint, the risk remains tilted to the downside while within this formation. Look for topside exhaustion ahead of the upper parallel IF price is indeed heading lower. Ultimately a larger breakdown may offer more favorable opportunities with a breach above the monthly open needed to shift the broader focus higher again.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
Key US / Mexico Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Active Technical Setups
- Australian Dollar Forecast: AUD/USD Breakout Pending- Aussie Setup
- Canadian Dollar Outlook: USD/CAD Probes Pivotal Support- Loonie Setup
- Gold Price Outlook: Can XAU/USD Break Critical Resistance? GLD Levels
- Euro Dollar Outlook: EUR/USD Bounce Faces First Test- NFP Levels
- Oil Price Outlook: Crude Caught at Resistance- WTI Breakout Pending
--- Written by Michael Boutros, Technical Strategist with DailyFX
Follow Michael on Twitter @MBForex
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.