USDMXN – Weekly Outlook- April 30 2020

USDMXN Outlook & Technical Analysis for binary options

Introduction

The US (Senates) passed another bill of $480 billion of relief package to support small businesses that the coronavirus outbreak has affected and for hospitals to expand coronavirus testing.

The bullish steam seems to have resumed in the last weeks of the month since the price of USDMXN failed to go lower than the previous support level. 

We shall be looking at the charts for it to give us a better understanding of the binary options market and also some fundamental facts.

Fundamentals 

Mexico GDP

The outlook of Mexico’s global economic sectors for the first quarter is weakened. The GDP growth showed a decline of 0.7% annualized up from the initial estimate of a -0.8%. However, the monthly economy index grew in April. 

The Mexican peso lost its ground against the dollar, while inflation held steady.

U.S. New Home Sales

The effects of coronavirus affected the sales of new homes in the US housing market. The home sales numbers for March came in at 5.27M, and it is down from its previous high of 5.76M in February. 

Things are bad for the US home sales; a divergence due to the rapid rise in unemployment, credit availability will be constrained because of the larger number of defaulters will likely increase. 

However, the CB consumer confidence data to be released on April 28 will give us a better picture of things. If Actual data is more significant than forecast (88.3), it is good for the economy, while the previous data was (120.0). 

USDMXN Long-term Direction: Bullish Breakout

USDMXN: Technical Analysis

Monthly Chart

USDMXN Outlook - Monthly Chart - April 30 2020

Monthly Resistance Levels: 25.77820, 22.03770, 19.65913

Monthly Support Levels: 17.44984, 18.53350

The bullish momentum of the USDMXN pair has been sustained by the bulls for the past three months. However, if the price of USDMXN can close above the recent high of 25.77820, the bulls’ momentum may continue as a result of the ongoing coronavirus pandemic.  

Weekly Chart

USDMXN Outlook - Weekly Chart - April 30 2020

Weekly Resistance Levels: 25.77820, 19.65913, 18.82790

Weekly Support Levels: 18.5225, 19.15094

The price of USDMXN pushed back up, retesting the resistance zone of 25.77820 after the initial bearish candle failed to go lower. 

The Stochastic is still at the overbought zone showing weakness in the bullish momentum, and it is advisable for traders to wait for a confirmation of price action for definite action.

USDMXN Mid-Term Projections: Strong Bullish Thrust 

Daily Time Frame

Daily Resistance Levels: 25.7782, 24.7841

Daily Support Levels: 19.9416, 20.2969, 22.836

For some days, the Mexican peso gained strength against the dollar pushing price down, and the sellers failed to take out the support zone of 22.836, market to establish a strong sell.

The USDMXN found support at the previous zone, and buyers rallied the price up after sporting a regular bullish divergence.

4Hour Time Frame

4Hour Resistance Levels: 25.77820, 25.44741, 24.78380 

4Hour Support Levels: 22.8360 

Bullish Scenario:

Currently, the bulls are pushing the price towards the 25.77820 marks. A general optimistic scenario is based on the candle that closes above the resistance zone. 

Bearish Scenario:

A bearish scenario will be based on the reaction of price around the resistance level with reliable confirmations like bearish engulfing patterns or pin bars. 

Conclusion

The US dollar remains a haven for investors, retail traders, and institutions. In this current situation that the coronavirus pandemic still ravages the world economy, a lot of resources have been pumped to the market for stability.

Key players are waiting for the price to establish its trend above or below the key levels of support and resistance.

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