USDMXN Outlook & Technical Analysis for binary options
There has been a general weakness of the US dollar in the past days due to a second wave of the coronavirus pandemic, alongside the trade war between China and the US.
This week’s economic calendar will go a long way in market direction for the bears or bulls on the RaceOption platform.
Mexico Business Sentiment Continues to recover. The Mexican manufacturing sector has continued to see a steady increase in performance from the low of 38.3% to a high of 38.7% after easing the coronavirus lockdown restriction amid the pandemic.
However, the 50 mark threshold and above signifies expansion within the manufacturing factories while below 50 shows contraction in the manufacturing system.
U.S. Non-farm Employment Change:
Forecast 1510K, Previous 4800K
The Labor Department is responsible for the data collated during July, they report on the numbers of new jobs within that period.
Some analyst believes that the outcome is not the true reflection on the data because of the pandemic containment measures put in place during the second wave of the coronavirus.
If the outcome of data is higher than the forecast, it is suitable for the US currency, but if it is below the expected result, then it is bearish for the US currency.
USDMXN: Technical Analysis
USDMXN Long-term Direction: Bullish and Slowing
Monthly Resistance Levels: 25.77820, 23.2710
Monthly Support Levels: 21.4590, 19.6848, 19.0266, 18.64510, 18.40470
The Mexican peso closed with a 5.93% gain against the US dollar for July 2020 with a bearish closing inside the bar; this shows that there are more sellers in the market than buyers.
If the bearish trend should continue and we get a close below the 21.4900 levels that will expose the support zones of 19.68180 and 19.02660 in the future.
Weekly Resistance Levels: 24.88850, 25.78360, 24.00000, 23.0000
Weekly Support Levels: 22.25607, 21.49303, 18.53999
From the resistance zones of 06 April and 04 May 2020, you can see that the Bears wherein control of the market from the highs of 25.78360 and 24.88850, respectively.
The bearish swing found support at 22.2507 before the correction phase of the swing rallied the price up to the 23.00000 level.
A collapse of the bullish accumulation may signify an end to the correction of the bearish swing to the downside. A close below the 22.25067 level will likely give the Mexican peso more gains against the US dollar.
The bulls can take the price of USDMXN up should the support zones hold against the bear’s surge in the week.
USDMXN Mid-Term Projections: Bullish Range
Daily Time Frame
Daily Resistance Levels: 23.64406, 23.19320, 22.93318
Daily Support Levels: 21.47879, 21.72288
From the trading platform, we can see that the 21.72288 and 211.47879 is a psychological zone. The bull’s needs the double bullish accumulation to playout from the support zone to take the price to the resistance level of 23.19320 and a close above will push it further.
4Hour Time Frame
4Hour Resistance Levels: 22.72556, 22.88000, 23.06060, 23.09520, 23.22937
4Hour Support Levels: 22.14420, 22.30270, 22.36870, 22.41424
The Mexican peso gained more during July by pushing the price from 23.22937 down to 21.813100.
As of this report, we can see that the USDMXN established support around the 21.94056 and 21.83100 zones. The bulls were able to rally to the upside of the market by taking price towards the resistance level of 22.54558.
A bullish scenario is building upon the H4 and daily time frames. If we get a close above the initial resistance, it will take the price to other resistance levels of 07 July and 30 June 2020 on the H4 trading platform.
For the bears to continue its rampage to the downside, it needs to close below the daily support level of 21.47879 to overturn the psychological zone into a resistance to favour the bears.
However, the primary trend is still bearish on the daily and weekly time frame. We shall observe the price reaction in the new week of a new month to know how the Mexican peso will behave.
Mexico is among the Latin Americans with many affected cases of the second wave of the coronavirus.
If this week’s non-farm employment claims are not favourable for the US, we may see another fall in the coming days.
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