USDMXN – Weekly Outlook- November 20 2019

USDMXN Outlook & Technical Analysis for binary options

Introduction

The USDMXN offers great swing trading opportunities on the higher and medium time frame on RaceOption platform. Most brokers do not offer this pair to novice traders under the cent accounts due to the volatile nature of the currency pair.

In this post, we’ll analyze the critical chart pattern driving the price swings and show you how to tame this beast.

Mexico Exports

The Mexican exports reading shows the total number of exports done in the previous month. Export is a reliable indicator in showing the overall health of the economy. Mexico has an export-oriented economy, with 89% of the main exports and total shipments being manufactured products while only 6% are oil and oil products.

If the reading is greater than anticipated, we conclude that it is bullish for the MXN. When the data reading is lower than forecasted, it is considered as a negative or bearish trend for the currency.

October data readings predict a bearish outlook for MXN with the previous figure at 40430.13, while the actual is 37221.87, while the forecast reading is 39,000.

U.S. Michigan Consumer Sentiment

The University of Michigan Consumer Sentiment Index, which is gathered from a survey of approximately 500 consumers, estimates the relative level of current and future economic conditions.

If the data reading is greater than anticipated, we can conclude that it is bullish for the INR. When the data reading is lower than forecasted, it is considered as a negative or bearish trend for the currency.

The latest data released November 8 predicts a positive outlook for USD with the previous reading at 95.5, the actual reading at 95.7, while the forecast figure is 95.9.

USDMXN Technical Analysis

USDMXN Long term Overview: Bullish Correction

Weekly Chart

First probing into the weekly time frame, we notice that the bullish harmonic pattern aligns with a collection of buy pressure signals on November 11 ‘19setting a higher support at 19.04745 compared to the October 28 low at 19.01758. 

USDMXN Outlook - Weekly Chart - Nov 20 2019

The dollar to pesos being a highly volatile pair, attracts huge speculative adoption among traders a on different trading platforms. It shows a strong bullish trend with deep cycles as illustrated above with higher lows at 18.86456 and 19.01758, alongside higher highs at 19.87994 and 20.25742.

USDMXN Medium Term Projections: End of Bearish Swing

Daily Time Frame

Next we take one step lower to the daily time frame showing a recent bottoming of the Mexican Peso on October 28 ’19 with support set at 19.01758. It proceeded to establish another higher low after a break of key resistance on November 04 and 12 respectively.

USDMXN Outlook - Daily Chart - Nov 20 2019

Upon entering the MA-50 resistance area, the USDMXN top by a collapse of inside bar support. The price decline was sharply halted with the Greenback again taking control of price and threaten to establish new monthly highs.

4HR Chart

The 4hour chart below illustrates a buildup of the major bullish swing after the breakout of significant resistance on November 07 12:00 and an increase in buying power on November 11 20:00. The price surge last for 18 bars – 4days 20hour, increasing by 23.6%.

Admittedly, the exchange rate plummet after a collapse of bearish inside bar and dipped below the MA-50, a bear-trap candlestick pattern forced the price back above the MA-50, showing strong bullish outlook.

2HR Chart

Okay, we round up with the 2hour time frame, where the price break above resistance on November 12 12:00 for an increase of about 2.17% from the bullish low of November 12 10:00

Conclusion

To conclude, the recent bear-trap pattern on the 2hour time frame offers scalp trading opportunity for quick gains, as the duo sustains a stable bullish expectation. Notwithstanding, that does not mean that we shouldn’t look out for bearish opportunities, only that it has to be taken with a high probability setup like the ones highlighted above.

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