USDMXN – Weekly Outlook- December 19 2019

USDMXN Outlook & Technical Analysis for binary options

Introduction

Traders generally favor trading the USD to Mexican peso on binarycent broker site due to its high volatility and decisiveness when a trend signal is signaled.

In this post, we’ll be taking a closer look at the technical and macroeconomic news driving the USDMXN in a southbound direction. 

Mexico GDP

The GDP is an evaluation of the annual changes in the inflation-adjusted value of all services and goods created by the country’s economy. 

A bullish trend can be expected for the MXN when the data released is higher than anticipated. If the data published is less than forecasted, then traders can expect a bearish trend for the currency.

Following the latest data published on November 25, traders can expect a bearish trend for the MXN as the data points the exact reading to be -0.3%, previous, and forecast reading to be -0.4%.

U.S. Existing Home Sales

The Existing Home Sales index is a measurement of variations in the number of existing residential buildings sold during the previous month. The report is evaluated annually, and it helps to determine the strength of the U.S. housing market.

An upbeat trend can be expected for the USD when the data released is higher than anticipated. If the data published is less than forecasted, then traders can expect a bearish trend for the currency.

Following data released on November 21, traders can anticipate an upbeat trend for the USD as the data shows the actual reading to be 5.46M, previous reading to be 5.36M, and the forecast data to be 5.47M.

USDMXN Technical Analysis

Monthly Chart

USDMXN Outlook - Monthly Chart - Dec 20 2019

Following our usual top-down analysis approach, we start with the monthly time frame, where the pair now appears to break below the symmetrical triangle after setting support on July 01 ’19 (18.86446).

A price close below the 18.86446 support will confirm the bearish scenario. On the other hand, we should look out for a price recoil to the upside from this level.

Let’s move to the lower time frames and get a different view of the price dynamics.

Weekly Chart

USDMXN Outlook - Weekly Chart - Dec 20 2019

The USDMXN from a weekly chart perspective is in a bearish trend-setting lower highs on August 26 ’19 (20.25739), September 30 ’19 (19.86202), and November 25 ’19 (19.65940).

A close below the double accumulation of bullish support levels (November 18 & 25), the USDMXN shows a strong bearish trend. The 200-weekly Moving Average is also breached, further highlighting the bearish outlook.

The bearish trend is speculated to continue into the remaining weeks of the year 2019.

USDMXN Medium Term Projections: Bearish 

Daily Time Frame

A hidden bearish divergence pattern flagged on December 04, 2019, offered a precise entry-level to enter a shot entry on December 04, 2019 (19.43546) and has so far declined by about (-2.71%).

The only hope for a bullish trend will surface if the current MACD level fails to move below the October 27 low, therefore forming a regular bullish divergence. On the contrary, we should look out for further price plunge, as there are no signs of price recovery at press time.

4HR Chart

Like most market crashes, the regular bearish divergence patterns on November 21 ’19 06:00 and November 28 ’19 18:00 switched the market sentiment from bullish to bearish after a combination with a collapse of bullish support on the same date.

The dollar to pesos rate plunged by (-3.40%) in favor of the Mexican peso. A hidden bearish divergence setup on December 11 ’19 14:00 forced the pair to resume the bearish trend.

Conclusion

Although the 4hour time frame shows a regular bullish divergence for a switch to the upside, the same MACD builds up an impending hidden bearish divergence pattern that will likely send the pair crashing south on the same 4hour time frame.

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