Last Updated on November 19, 2020
USDMXN Forecast – November 20, 2020
The USDMXN pair has been in a downtrend for seven months now, and the Mexican peso shows strength against the greenback since the coronavirus crisis began earlier in the year 2020.
With all this happening, the top binary options brokers in the United States will be watching the pair’s reaction as it approaches a significant support zone in days to come.
After the Coronavirus pandemic has subsided, and the global lockdowns were lifted, Mexico’s unemployment rate dropped below the forecast of 5.3% to 5.1% in the previous month.
The pandemic’s effect affected the labour market, affecting both the women and men population in aspect. However, the women percentage dropped from 5.2 to 4.5 while the men rose from 5.3% to 5.4%.
The Mexico peso has been trading higher around 23.2 against the dollar as some fundamental news about the experimental vaccine on COVID-19 prevention was 94.5% effective by Moderna Inc.
Recently Mexico’s central bank did not change its interest rate but left it at 4.25%, shocking market participants anticipating a 25 bps rate cut.
Jobless Claims Forecasted 707K while previous was 709K
The jobless claim report was gotten from the labour department, indicating those numbers of individuals who applied for insurance regarding unemployment for the first time during the previous week.
This report is generated weekly and helps to know the general condition of the economy. Those responsible for the countries’ overall state of monetary policy need to consider unemployment since the labour market and consumer spending are correlated.
When the actual data is higher than what was forecasted, it is not suitable for the currency. Still, when the released information is lower than the predicted, it is ideal for the U.S. dollar.
USDMXN Technical Analysis
USDMXN Long-term Direction: Bearish
Monthly Resistance Levels: 23.2710, 22.909, 20.83770
Monthly Support Levels: 18.4047, 19.6848
The Mexican peso has been extending its gains against the U.S. dollar, having closed below the 20.83770 levels with big bearish candles approaching the support levels of 18.4047.
The coronavirus pandemic affects the most acceptable currency (U.S. dollar) in the world due to the lockdown that shut global businesses down for months, which also led to the currency’s weakness.
The bulls may likely find their ways back into the market from the support zones of 19.6848 should the Bears fails to close below the low of 18.4047.
Weekly Resistance Levels: 22.89923, 25.78118
Weekly Support Levels: 20.03381, 19.65940
The weekly chart shows that the trend has been a downtrend from the resistance levels of 25.78118 as of April 6, 2020. Currently, the pair is approaching an old resistance level (20.03381) of November 25, 2019, that was broken, which may act as a support for the USDMXN pair in the coming week.
In weeks to come, we may see the pair finding reliable support to push the USDMXN up from the zone of 19.65940 if the price respects the previous levels of support to form a double bottom.
USDMXN Mid-Term Projections: Bearish
Daily Time Frame
Daily Resistance Levels: 22.17912, 22.54014, 22.93163, 23.22942
Daily Support Levels: 20.03381
The support level of 20.03381 is when some brokers observe a double bottom price reversal pattern for a bullish push.
If the bulls can close above the October 29, 2020, level (21.13456), we shall see another rally to the 22.17912 resistance levels.
The bearish trend is not over until we see a failed swing to the downside; the Mexican peso will have to close below the low of 20.03381 to continue the bearish swing.
4Hour Time Frame
4Hour Resistance Levels: 21.98285, 21.45422, 21.28116, 20.59059
4Hour Support Levels: 20.03381, 20.24604, 20.33524
The four-hour chart shows the market’s bearish swing dominance right from the high of 21.98285 down to the low of 20.24604. We may get another bearish trend if the price closes below the 20.24604 levels in the coming days.
However, it is also possible for the pair to see the Bulls take over the market from the bottom of the support level (20.024604) for a bullish rally if the price can close above the 20.68322 levels.
A general bullish scenario based on the four-hour time frame is very low as we have not seen a bullish confirmation pattern to indicate a reversal of the trend. However, we may expect a recovery to favour the USD considering that it currently trades below the MA-20 and in the oversold region from the monthly time frame.
A general bearish scenario based on the daily time frame has dominated the market, and the Mexican peso kept making gains against the U.S. dollar after closing below crucial supports.
The bearish trend will continue if the price can close below the support of 20.03381 levels.
Can you see that the Mexican peso is still in advantage over the other pair as of this report?
The above findings show that most nations’ economic conditions are on a slow recovery after the coronavirus crisis.
It will interest the broker to see the rates of unemployed drop as businesses open up globally.