The USD MXN is on the move. Is trading forex worth it? Take a look and see what is in store for you to add to your forex account this week. It is all about PIPS, PIPS, and more PIPS …
Daily charts for the USD MXN
The USD continues to exhibit signs of weakness overall in forex and the Mexican Peso may be able to feast upon the notion more bearishness via the Dollar will emerge mid-term. The Mexican has been following a down trend line touching it at times and then immediately bouncing off it and continuing down. The Mexican has finally broke through the first down trend line and with the rsi below the sell zone indicates there is more up movement to come from this pair in this time zone. This pair should reach the .236 at 2049189 on the secondary fib giving 3,256 pips. It should continue to the second down trend line and the.382 on the secondary fib at 20.78366 and the .180 on the primary fib at the same price level. This should give 6,039 pips.
Hourly charts for the USD MXN
The Mexican has made a nice movement up breaking through the down trend line. The rsi is in the buy zone and headed up to the sell zone. This pair should reach the 1.618 at 20.29445 on the secondary fib giving 1,052 pips. It should continue to the .618 at 20.36493 on the primary fib and should give 1,714 pips.
Important USD MXN Levels to follow
MEXICAN INFLATION (CPI) REPORT OVERVIEW:
- The November Mexican inflation (CPI) report will be released on Wednesday, December 9 at 13:00 GMT. A slight moderation in price pressures is anticipated.
- USD/MXN rates have broken below the key psychological level of 20.0000, continuing its losing ways since the US presidential election.
- Retail trader positioning suggests a bullish bias to USD/CAD rates, which may portend poorly for the Mexican Peso.
USD MXN in the news
The November Mexican inflation (CPI) report will be released on Wednesday, December 9 at 13:00 GMT. According to a Bloomberg News survey, a slight moderation in price pressures is anticipated with the headline inflation rate due in at 3.41% from 4.09% in October. While weaker price pressures are not surprising in the face of the coronavirus pandemic, the changing composition of Banxico suggests that weaker inflation data may be the excuse needed to restart a rate cut cycle.
At the start of the week, Mexican President Andres Manual Lopez Obrador nominated Galia Borja Gomez, the Treasurer of the Mexican Finance Ministry, to join Banxico has deputy governor. Historically, Banxico has had a hawkish tilt, seeking to keep price pressures down even if it meant constraining growth. But the ascent of Gomez to deputy governor, coupled with downside price pressures, may be cultivating an environment where Banxico seeks to tamp down the Mexican Peso.
There has been considerable downside in USD/MXN rates in recent weeks, with the pair continuing its descent within the parallel downtrend dating back to the coronavirus pandemic high set in April. Since the test of channel resistance at the start of November, which came in the form of a bearish outside engulfing candle, USD/MXN rates have been biased lower.
Bearish momentum has been strong, with USD/MXN rates below their daily 5-, 8-, 13-, and 21-EMA, which is in bearish sequential order. But daily MACD is trending higher below its signal line, while Slow Stochastics are perking up in oversold territory. Still, in the past two weeks, two significant Fibonacci retracement levels serving as critical support have broken: the 76.4% retracement of the 2020 low/high range at 20.2349; and the 38.2% retracement of the past 10-years of trading low/high range (April 2011 low/April 2020 high) at 20.3215.
Were USD/MXN rates to retake the 20.2349/20.3215 area, the daily 5-, 8-, 13-, and 21-EMA envelope would be broken, giving credence to a bullish reversal. Nevertheless, the broader context of any USD/MXN price action would be in context of the broader downtrend, suggesting that rallies may look to be sold in the foreseeable future.
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