USDMXN Outlook & Technical Analysis for US binary options
The coronavirus pandemic is gradually losing its grip over the global economy as nations across the globe, slowly reopen businesses to revive their economy despite the effects of the pandemic.
The Mexican peso had a boost in the market as revealed on VideForex platform, following the optimism surrounding the openings of the Mexican economy.
The coronavirus pandemic has hit the Mexican peso like other world economies. The Mexican central bank cut its rate by 175bps. It is believed that they expect the central bank to ease her monetary policies aggressively because it has no sufficient fiscal policy to help its economy weather the pandemic.
U.S. HOMES SALES
The US home sales reports have a ripple effect on the health of the economy because it shows the purchasing strength of citizens for new owners, mortgages sold by finance banks and service changed by brokers to carry out the transaction.
The Actual data released was 4.33MM, which is higher than the Forecast 4.30M, which means than it favoured the currency; the previous result was 5.27M. This shows that the health of the US economy is getting better.
USDMXN Long-term Direction: Bullish and Slowing
USDMXN: Technical Analysis
Monthly Resistance Thresholds: 23.2710, 25.77820
Monthly Support Thresholds: 18.74620, 19.62210, 17.0509, 17.9517
The bullish momentum has been on for sometimes since it found its support from the 18.74620 zones, taking USDMXN price to the high of 25.77820.
Since the establishment of this year’s high resistance on 01 Aril 2020 (25.77820), the Mexican peso strengthened against the dollar for the past month.
The USDMXN price is correcting back towards the previous level of resistance (22.7240) that broke out from which may as a support in the coming months, should the bears push the price further down.
Weekly Resistance Levels: 25.77820, 19.65913, 18.82790
Weekly Support Levels: 18.5225, 19.15094
After weeks of the bulls rally with a divergence since February, the market went into a consolidation after hitting a resistance level of 25.77820, April 06, 2020.
The bears are taking over the market now after it merged for some weeks. The hanging man and bearish accumulation at the resistance gave us confirmation, and the stochastic is also at the overbought region.
We expect the price of USDMXN to drop further in the coming weeks if all things being equal.
USDMXN Mid-Term Direction: Bearish
Daily Time Frame
Daily Resistance Levels: 25.77836, 25.29349
Daily Support Levels: 21.00, 20.20
After the bulls failed to go above the 24.7841 resistance zone, a bearish Accumulation resistance on May 15, 2020, sets in the pace to drive USDMXN to the downside for some days before we get another bias in the market.
A collapse of the second trend line forming the Chuvashov’s fork on May 11, 2020, reinforced the regular bearish divergence pattern on April 06, 2020 sending the USDMXN exchange rate into a downward spiral.
4Hour Time Frame
4Hour Resistance Levels: 24.63949, 24.88850, 24.18858, 24.40221, 23.55132, 23.77704
4Hour Support Levels: 22.70858
Since the support level (23.55512) was taking out, the USD vs. MXN has been on a downtrend.
The bullish steam was weak from the 24.8000 resistance level because the market keeps making lower lows and lower highs, establishing a downtrend.
On the higher time frames, the primary trend of USDMXN is bullish, and it is now in a corrective stage. However, if the correction does not become a reversal of trend, we might get a continuation of the primary trend.
A bearish trend is at play in the market now on the smaller time frames. The bearish bias is taking the price down and keeping in mind that its primary trend is bullish.
The coronavirus pandemic cases are showing results of fresh cases slowing down as efforts to stop its spread are showing significant results.
This coming week the US financial markets will be closed for President’s Day, and there will be a public holiday in most parts of the world in line with the Muslim festival.
The USDMXN is currently on a downward trend on the smaller time frame, and we keep in mind that the primary trend is bullish, except we get a complete reversal of the trend.