USDMXN – Weekly Outlook- January 16 2020

USDMXN Outlook & Technical Analysis for binary options

Introduction

The USDMXN has been in a sideways market formation on VideForex broker all through last week and into this week after a bearish price slump from the December 03, 2019, 22:00 critical support on the 4hour chart.

This week, we’ll be taking a dive into the technical and some fundamental drivers of the USD vs. Mexican peso and find out possibilities of continuation or reversal in the exchange rate.

Mexico Consumer Price Index (CPI) 

The Consumer Price Index (CPI) is a key method of evaluating any variations in purchasing trends and inflation. It evaluates the shift in the price of products and services from the consumers’ perspective.

We can expect a bullish sentiment for the currency when published data is higher than anticipated. However, if the published data reading is less than the value of forecasted data, then we can envision a bearish outlook for the currency.

As a result of the above parameters, we can expect a positive outlook for the MXN considering data published on January 09, 2020. The data states that the actual reading is 2.83%, forecast reading is 2.76%%, while the previous reading 2.97%.

U.S. Building Permits

Building Permits is an evaluation of changes in the number of new building permits issued by the government. The indicator is key to determining the level of demand in the housing market.

We can expect a bullish sentiment for the currency when published data is higher than anticipated. However, if the published data reading is less than the value of forecasted data, then we can envision a bearish outlook for the currency.

As a result of the above parameters, we can expect a positive outlook for the USD considering data published on January 09, 2020. The data states that the actual reading is 1.482M, forecast reading is 1.410M, while the previous reading 1.461M.

USDMXN Technical Analysis

USDMXN Long term Overview: Bearish

Monthly Chart

USDMNX Outlook - Monthly Chart - January 16 2020

The Mexican peso is slowly gaining strength after the USDMXN failed to close above the June 2018 all-time high (20.96038). 

A price breach of September 02, 2019, and November 01, 2019, inside-bar candlestick patterns are confirmations to short the USDMXN further.

If the price continues south and close below April 01, 2019, support, the first profit target would be at 17.93986, and second profit objective at 17.45165.

Below, we move on to analyze the weekly time frame.

Weekly Chart

USDMNX Outlook - Weekly Chart - January 16 2020

After setting a lower high at 19.65940 on November 25, 2019, the dollar to pesos exchange rate cracked through the MA-200 support, which now serves as a resistance level.

The bulls couldn’t move the USDMXN exchange rate above the 200-period Moving average after setting a high at 19.02762.

We expect a continuation of the bearish trend into the remaining days of the week.

USDMXN Medium Term Projections: Bearish 

Daily Time Frame

Bearish momentum is displayed on the daily chart of the USDMXN, after the pair signaled a bearish pressure resistance at 19.65940 on November 28.

The price has so far slumped by -3.54% from December 04, 2019, close (19.43536), while staying in a bearish consolidation state, breaking below bullish support levels at 18.89589, and 18.84140.

Conclusion

Although the USDMXN maintains a general bearish price outlook, we should look out for an impending regular bullish divergence of the stochastic oscillator may lead to a reversal of the bearish trend.

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