- During Good Friday trading the US dollar did bounce ever so slightly against the Mexican peso.
- But clearly, there are some issues with the uptrend here.
- We are hanging around the 200-day EMA, and if we do, in fact, start to break down from here, you then have to anticipate that perhaps we could drop to the 19 peso level.
When you look at the chart going back about four years, you can see that the area between 20 and 21 pesos was in fact a major area of transactions in the past. So, for it to act as a bit of a barrier probably wouldn't be a huge surprise. And in fact, it would just be simple technical analysis. On the other hand, if we do turn around, perhaps due to some type of extension of the trade spat or concerns about the Mexican economy or further tariffs, which I don't think Mexico is going to suffer further tariffs, but it is a possibility, then if we turn around and take out the 21 Mexican peso level, we could be looking at a major breakout. So, it'll be interesting to see how this plays out.
W Patterned Ended Where it Measured to End
Top Forex Brokers
The previous W pattern had a measured move of about where we ended up. So, I think you could, at this point in time, suggest that all of the previous technical analysis, with the exception of the support and resistance barriers, might be a thing of the past. I'll be watching for a little bit of a bounce and see how we behave near the 20 Mexican pesos level, because if we fail from there, then I think it's a good shot that we continue to drop.
That being said, the US dollar is oversold against multiple currencies, and it is probably only a matter of time before traders will continue to look at this for a potential longer-term play. After all, the interest rates in Mexico are much higher than they are in the United States.
Ready to trade our Forex daily analysis and predictions? Here are the best forex brokers in Mexico to choose from.