USDMXN – Weekly Outlook- December 5 2019

USDMXN Outlook & Technical Analysis for binary options

Introduction

The USDMXN has mostly become a favorite pair among binary options brokers such as Race Option, owing to its high volatility. By trading with low leverage, one can quickly profit from its bullish and bearish swings.

In this article, we analyze the significant drivers of the trend, reversal patterns, and touch on some interesting macroeconomic news events. 

Mexico GDP

It is the evaluation of the yearly fluctuation in the inflation-adjusted value of all goods and services generated by the economy. It is a principal pointer of economic health.

 Traders can expect a bullish sentiment for the MXN when data reading is higher than anticipated, while traders can expect a bearish trend if the data reading is lower than forecasted.

With data released on November 25, showing actual reading to be 0.0%, and previous and forecast reading to be 0.1%, we should expect a bullish sentiment for USD.

U.S. Factory Orders

Factory Orders evaluates any variations in the total value of new purchase orders placed with manufacturers. 

Traders can expect a bullish sentiment for the USD when readings are higher than anticipated, while traders can expect a bearish trend when the readings are lower than forecasted.

With data released November 04 showing actual reading to be -0.6%, previous reading to be -0.1%, and forecast reading to be -0.5%, we should anticipate a bullish sentiment for USD.

USDMXN Technical Analysis

USDMXN Long term Overview: Bullish Correction

Monthly Chart

USDMXN Outlook - Monthly Chart - December 5

Starting from a monthly chart illustration, the USDMXN is enclosed within a symmetrical triangle, bouncing within the bearish and bullish trend line.

A more likely scenario is a bullish swing at press time as the pair trades close to the MA-50 zone after breaking above resistance on Aug 01 ’19.

Weekly Chart

USDMXN Outlook - Weekly Chart - December 5

The weekly time frame above shows the dollar to Pesos rates forming a higher high on Nov 18 ’19 compared to the lower low of the MACD oscillator.

Establishing a low at 19.36880, the price surged high by about 1.5% after a close above 19.2495 resistance on Nov 18 ’19.

Last week’s bullish price close confirms strong bullish presence suggesting that we maintain our position going long.

USDMXN Medium Term Projections: End of Bearish Swing

Daily Time Frame

Consider the above daily chart, observe the way the pair sustain a bullish trend-setting higher lows from a rejection of resistance levels on Nov 12 ’19 (19.07819) and Nov 25 ’19 (19.31530). 

Upon the bullish close above the MA-50, the pair attained an increase of about 1.82% at publication time.

The bullish trend increase is a sign of a weak Mexican Peso.

4HR Chart

Let’s throw more light on the bullish trend by zooming way down to the 4hour time frame.

Notice how both bullish and bearish divergence patterns set the pair in an ascending channel, with an initial support level at 19.22860, followed by 19.31393, and 19.42377.

The bearish divergence patterns set higher highs at 19.35560, 19.43734, respectively 19.65940 on Nov 13 18:00, 21 06:00, and 28 18:00.

So far, the dollar to Pesos rate has not been able to breach the 19.6594 resistance as it now goes to close below the MA-50 after a double top formation. 

Conclusion

The daily time frame bullish pressure resistance proves to be a strong force to reckon with as the Mexican peso finds it challenging to breach it. Now the USDMXN shows a solid bearish outlook on the 4hour time frame at press time. 

If a bullish divergence pattern emerges, we anticipate a continuation of the bullish trend with the pair trading above the MA-50 on the H4 time frame.

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