USDMXN – Weekly Outlook- July 26 2019

USDMXN Outlook & Technical Analysis for US Binary Options

Introduction

The USDMXN currency pair is a commonly traded pair on BinaryCent platform owing to its high volatility and relatively low spreads.

This week, we analyze technical patterns as well as fundamental drivers of the pair.

Fundamentals: Mexico PESO

Carlos Urzua, the Finance minister from Mexico, resigned on 09 July ’19, citing disagreements with the government of President Andres Manuel Lopez Obrador. The former minister stated in his resignation note that the government was forming economic policy based on extremism and without sufficient foundation. Following his resignation, the Mexican peso dropped over 2%, and the benchmark stock index fell around 1.5%.

Reacting quickly and decisively, Lopez Obrador in his stead promoted Deputy Finance Minister Arturo Herrera to Finance Minister. This saw the Mexican peso and the benchmark stock index recover quickly. 

USD NEWS

U.S. Existing Home Sales

Existing Home Sales evaluates the variation in the yearly figure of existing residential buildings traded during the preceding month. This information is used to evaluate the strength of the U.S. housing market and is a major indicator of the overall US economic health.

A reading greater than expected should be seen as a positive sentiment for the USD, while a lesser reading should be taken as bearish for the currency.

From the latest data, the previous reading of June 21 is 5.21M while forecast reading is pegged 5.29M indicating a bullish sentiment for the USD.

USDMXN Technical

USDMXN: Monthly Chart

The Doji candlestick pattern formed on June ’18 established solid resistance at 20.96038. Attempts by the bulls to take the Mexican Peso higher failed to selling pressure on January 01 ’19 with another resistance set at 20.65754.

The consecutive lower highs and higher lows formed on the above monthly time frame forms a symmetrical triangle, meaning that the USDMXN could go either in the bullish or bearish direction.

USDMXN: Weekly Chart

A breakdown of bullish accumulation on Jun 18 ’18 confirmed the Doji candlestick pattern as a bearish one, therefore reinforcing confidence to enter a short sell order.

It’s been a rollercoaster from the June 18 ’18 price breakdown, creating excellent swing trading opportunities on Aug 06 ’18, December 17 ’18 and June 10 ’19.

The pair currently trades within the resistance and support levels of a bearish accumulation pattern at 19.36626, and 18.86446 respectively.

USDMXN: Daily Chart

Another breakdown of bullish accumulation, this time around on the daily chart was signaled on June 04 ’19 brought the price of the Mexican Peso to a low of 18.86446 before signaling a counter break of bearish resistance on July 16 ’19.

The hidden bullish divergence combined with an increase in demand on July 19 ’19 prepares the dollar to Peso for a bullish trend. 

USDMXN: 4HR Chart

A collection of bulls on July 15 ’19 16:00 and July 18 ’19 20:00, confirm the bullish swings on the above 4hour chart.

Upon entering the overbought territory, a failure of demand on July 24 ’19 00:00 led to the recent price plummet of the USDMXN.

USDMXN: 1HR Chart

Finally, zooming way down to the 1hour time frame reveals swing trading setups from breakout of bearish resistance on July 22 ’19 19:00, July 23 ’19 12:00, and breakdown of bullish support on July 23 ’19 23:00.

Conclusion

At press time, the USDMXN price see a huge whipsaw on the intraday 1hour time frame. Although the pair shows bearish outlook, a breakout of the 19.12775 on the 1hour time frame indicates a switch to bullish sentiment.

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