USDMXN – Weekly Outlook- January 29 2020

BTCUSD Forecast and Technical Analysis & Fundamentals for Bitcoin

Introduction

Last week, the USDMXN came out of mid-term oversold area on BinaryCent , following a bearish trend reversal in the form of a divergence setup on the daily TF.

This week, however, we’ll be analyzing different price patterns that may resume the bearish trend, or perhaps extend the bullish trend.

Mexico Retail Sales 

Retail Sales measure, which is a significant index on consumer spending, evaluates differences in the cumulative value of inflation-adjusted retail sales.

A higher than expected reading is thought of as a positive trend for the MXN, whereas a lower than expected data reading is rated negative for the currency.

Most recent data suggest that a bearish outlook is imminent for the MXN with the data readings showing that the actual reading 1.7%. In contrast, the previous reading is -2.3%, and the forecast figure is -0.1%.

U.S. New Home Sales

New Home Sales is an index that gauges the annual number of new single-family homes sold during the previous month.

A higher than expected reading is thought of as a positive trend for the USD, while a lower than expected data reading is rated negative for the currency.

Most recent data suggest that a positive outlook is imminent for the USD with the data readings showing that the actual reading is 694K, while the previous reading is 697K, and the forecast figure is 730K.

USDMXN Long term Overview: Rang Bound

USDMXN: Technical Analysis

Monthly Chart

USDMXN Outlook - Monthly Chart - January 29 2020

The USDMXN trades within two major horizontal channels. The first being the Jan 02 ’17 (22.04012) resistance – Jul 03 ’17 (17.45165) support, and second channel is the Nov 01 ’18 (20.63584) – Mar 01 ’19 (18.74686) support.

So far, an attempt to close below the 18.74686 support level failed as the pair entered the oversold area on the weekly time frame.

Weekly Chart

USDMXN Outlook - Weekly Chart - January 29 2020

Coming down to the weekly time frame, the Mexican Peso showed strength after the bears drove the dollar to pesos exchange rate below a hidden bullish divergence trend line that coincide with the 200-weekly MA. This sent the pair into the oversold area and still shows a bearish outlook despite a short term bottoming on Jan 20 ’20.

The pair approaches the MA-200, a formal support that we now believe to be a significant resistance level.

An exit of the oversold area in combination with a close above the MA-200 should be the signal needed by the bulls to drive the price further up.

USDMXN Medium Term Projections: Bearish 

Daily Time Frame

USDMXN Outlook - Daily Chart - January 29 2020

Here on the daily chart, we uncover the pattern responsible for the price bottoming mentioned at the monthly overview, which happens to be a regular bullish divergence setup.

The bearish trend started after a collapse of bullish support (19.52546), slumped by 4.05% from the breakdown point and sprang back up from the divergence support.

Conclusion

As mentioned in our last analysis of the USDMXN, the bullish divergence setup did confirm a mid-term price bottoming that may perhaps transition into a long-term bullish move, should certain resistance levels get breached.

A slowing of the bullish move is expected as the price trades around the daily and weekly MA resistance. 

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