Mexican Peso On The Cusp Of A Huge Break
Axi | Mar 16, 2017 11:03
Originally published by AxiTrader
Recently I've been writing about the Mexican peso's strength against the US dollar.
I've explained why I think the explanation for this strength might lay in game theory and poker. And recently I looked at the technical outlook and the USD/MXN four tests of the 200 day moving average over the past year.
But this morning, in the wake of the US dollar's heavy fall last night, it's looking increasingly likely that the peso may be in for a run toward 18.59/60 and perhaps even a full retracement to the 18.15 low on the 9th of November last year when president Trump won the US election.
USD/MXN is up a smidge from when I prepared the above chart at 19.23 at the moment. But it is clear in the chart above that USD/MXN has broken down below both the 200-day moving average and the uptrend line which started with the USD/MXN bull run back in 2014.
These are very big, long term, and important levels. So with prices looking a little oversold in the short term this move lower may be fraught.
But as feedback from traders and the Twitterati on my recent notes on the pesos move have highlighted this is a rally that is persisting but nobody seems to believe in or like. So I'll retain a view that USD/MXN heads toward the 38.2% retracement level of the 2014-2017 rally at 18.59. And if that breaks its back the low of November 9 where I'll be targeting on my shorts.
Have a great day's trading.
Get The App
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.