USD/MXN Technical Forecast: Bearish It has been an fascinating week for USD/MXN because the pair tried to interrupt decrease howe
USD/MXN Technical Forecast: Bearish
It has been an fascinating week for USD/MXN because the pair tried to interrupt decrease however ended up reversing and pushing again up above the 20 mark.
Really helpful by Daniela Sabin Hathorn
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The week began off with a brand new 9-month low at 19.69 while worth motion was retaining to the descending trendline resistance. However a push larger from the US Greenback on Wednesday was sufficient for USD/MXN to reverse worth motion and head larger for the subsequent three classes, doubtless tripping some short-term stops alongside the best way.
This transfer larger isn’t essentially a change in longer-term development, as there may be nonetheless a powerful case for bearish stress to proceed, however as talked about many occasions earlier than, short-term reversals are anticipated within the continuation of longer traits. In reality, this push above the 20 line has solely made the pair extra enticing to new sellers, and the 76.4% Fibonacci at 20.18 is an efficient place to start out.
This space is a crucial resistance line and a short-term correction again on the finish of November already noticed a rejection at this stage. USD/MXN does appear to have stable technical traits, and we will anticipate this to proceed going ahead, so a break above 20.18 may set off one other spherical of bullish assist sending the pair in the direction of the 20.50 line, the place the 50-day transferring common converges.
USD/MXN Each day chart
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However, if the trail of least resistance continues to be decrease, the 19.87 space is more likely to provide renewed assist, as will the psychological 20 mark. We would wish to see USD/MXN under the descending trendline to contemplate a brand new retest of the 9-month lows, heading in the direction of the 19.50 line, earlier than topping with one other key resistance space at 19.14.
USD/MXN Weekly chart
On the weekly chart, we will see there are three dominant trendlines which are shaping USD/MXN worth motion, which suggests the pair could possibly be caught between 19.70 and 21.10 earlier than making an attempt to push in the direction of 18.20, the place the decrease certain trendline is discovered. Additionally to notice is that the weekly low is resting on the 200 SMA so additional draw back goes to wish sturdy assist from sellers to interrupt the 19.69 space.
— Written by Daniela Sabin Hathorn, Market Analyst
Observe Daniela on Twitter @HathornSabin