USDMXN – Weekly Outlook- July 3 2019

USDMXN Outlook & Technical Analysis for Binary Options

Introduction

Highly liquid and volatile pairs like the USD to Mexican Pesos are top on the watch list of serious traders when trading on binary options brokers platforms. 

The dollar to Pesos has been experiencing huge swings on the higher time horizons. Let’s probe into the technical and fundamental events that may drive this pair this week.

Fundamentals

Consumer Confidence (MXN) Mexico

Coming up on Thursday 04 July ’19 is Mexico consumer confidence a leading indicator released by INEGI, as a gauge of consumer confidence on issues that concerns the nation’s economy.

Starting from 05 March ’19, the consumer confidence has been in a downward spiral from 116.8 to 108.1 indicating successive weak confidence and a consequently bearish for the economy.

USD NEWS

ISM Non-Manufacturing PMI (Jun)   

The Institute for Supply management ISM releases this macroeconomic indicator, which reveals the general business conditions of the sector in the US that are not into manufacturing.

Although this indicator does not affect the GDP compared to the ISM manufacturing, a value greater than 50 indicates to a healthy economy.

On 05 June ’19, the result was at 56.9, a value higher than the 03 May ’19 55.5.

USDMXN Technical

USDMXN: Monthly Chart

USDMXN Outlook - monthly Chart -  July 2 2019

The Mexican pesos strengthened against the USD following a failure of the 19.57638 USD support on 01 January ’19 and setting up a sound resistance at 20.65754 USD.

Another buying pressure pattern was again signaled on 01 March ’19 with support at 18.74686, projecting consecutive bullish closing monthly bars. However, the dollar to Pesos rate enters a parabolic cycle of opposing bullish and bearish closing bars, showing more of a bearish bias.

USDMXN: Weekly Chart

USDMXN Outlook - weekly Chart -  July 2 2019

A view from the weekly time frame of the USDMXN currency pair reveals details into the breakdown on the monthly chart.

The above chart highlights a classical change in polarity from buying pressure to selling pressure. Notice the long upper wicks of the consecutive bullish closing candlestick on 05, 12, 19 November ’18; the price gradually eased from bullish to bearish sentiment by signaling a formation of opposite consecutive bearish closing candlesticks for a price drop of about 6.7%.

More recent bearish and bullish resistance and support levels are set up at 19.88062, and 18.89340. A breakout of either of these levels will give clarity to the price direction.

USDMXN: Daily Chart

The lower daily time frame offers a better reward to risk entry setups, starting with a break of bearish resistance of 18.82986 USD for a potential profit of about 5.1% compared to a 1.0% risk.

An opposite failure of support (19.60876 USD) and exit of the overbought region forced the dollar to peso exchange rate into a downward spiral for about 3.4%. 

The current price range of the pair from the above chart is excellent for exiting a short order from the earlier breakdown of support on 04 June ’19.

USDMXN: 4HR Chart

From the above 4hour chart, the USD entered a bullish trend, after exiting the oversold region, followed by a break of selling resistance on 21 June ’19 00:00. Before reaching the opposite overbought horizon, the Bulls lost steam and signaled bull trap signal on 26 June ’19, followed by another rejection of bullish support on 30 June ’19 20:00.

The dollar to pesos chart headed south for about 0.6% from this level with no sign of a bullish setup.

USDMXN: 1HR Chart

Lastly, the 1hour intraday chart shows a bull trap candlestick formation on 01 July ’19 05:00, which brought the USDMXN price into oversold territory, after which the price exited the RSI level-30 and closed above bearish resistance at the eleventh hour of the same day.

Conclusion

A double bottom chart pattern signaled in combination with a break above selling resistance was flagged on 02 July ’19 17:00, emphasizing a highly probable level for a long position is shown on the updated 1hour chart below.

The lower daily, 4hour, and 1hour time frames are recommended for low-risk signals when trading the USDMXN.

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