USDMXN – Weekly Outlook – November 4 2020

Last Updated on November 4, 2020

USDMXN Forecast – November 4, 2020

With the U.S. presidential election this week, we shall see the market reacts with high volatility during the election. Best binary options brokers and investors should trade safely during the period of the election.

US Dollar vs Mexican Peso Fundamentals 

Mexico Fundamentals 

GDP Growth Rate

After the easing of coronavirus restriction within the country, businesses have picked up in some sectors. Mexico’s GDP’s growth rate increased by 12% as of September 2020 from the contraction it underwent during the coronavirus pandemic that shut the global economy. 

The Mexican economy recovered from the contraction by 17.1% against the 11.9% forecasted. The Industrial activities gained 22% expansion from a 23.4% plunge in the second quarter of 2020.

U.S. New Home Sales

Non-Farm Employment: f 600k previous 661k

The Bureau of Labor Statistics releases this data, and it is done shortly in the first week of a new month. This report is a top point for consumer spending and the economic activity of the nation.

The report indicates the changes seen in the numbers of employed people in the last month, excluding those in the farming sector.

If the outcome is greater than the forecast, it is suitable for the U.S. currency, while a lower result will send the currency bearish.

USDMXN – Technical Analysis

USDMXN Long-term Direction: Bearish 

Monthly Chart

Monthly Chart of USDMXN - November 4, 2020

Monthly Resistance Levels: 22.9090, 23.2710, 25.77820

Monthly Support Levels: 20.8377, 19.6848

The Mexican peso has been trading strong against the U.S. dollar for the past few months amid the coronavirus pandemic, which weakened the global market.

 As the new month begins, the brokers are interested in the upcoming U.S. presidential election to drive the U.S. dollar direction in the coming weeks.

The Mexican peso targets the support one of 19.68480 as the bearish trend began from the resistance level of 25.77820 that dominated the market since the general weakness of U.S. dollars.

From the 20.8377 support levels, there are chances the Bulls will have an upward rally once there are positive indications from the U.S. economy and the political scenario happening.

Weekly Chart

Weekly Chart of USDMXN - November 4, 2020

Weekly Resistance Levels: 22.89823, 21.49303

Weekly Support Levels: 18.539, 21.49

A bearish trend may continue as the stochastic signal line enters back into the oversold region, which may indicate the bearish trend that may take the price to the low of 18.539 since the collapse of bullish accumulation support 13th July 2020 was taking out. 

We should have a possible push lower in the coming days as long as the 21.49303 levels hold. 

The USDMXN will need to establish a solidified support before the bulls can step into the market, and a close above some resistance levels will attract more buying sentiments.

USDMXN Mid-Term Projections: Bearish 

Daily Time Frame

Daily Chart of USDMXN - November 4, 2020

Daily Resistance Levels: 21.49836, 22.15105

Daily Support Levels: 20.84844, 21.1213

The bullish accumulation resistance of 21.49836 is a level that the bulls must overturn to support for it to have an upward rally in the future. 

We can see a possible double bottom pattern buildup on the daily chart where the lows of 20.84844 have been tested twice for a potential rise.

4Hour Time Frame

H4 Chart of USDMXN - November 4, 2020

4Hour Resistance Levels: 22.68134, 21.76316, 21.52828

4Hour Support Levels: 20.8000

The four-hour time frame had a bearish swing from the 22.68134 level down to the support level of 20.8000 before the bulls could push back. 

The simple moving average is acting as a resistance to the bullish surge from 20.8000 levels, a close above the resistance level of 21.52828 will give us an uptrend to a higher level of 21.52828.

If the price should fail to go higher, we may see it drop lower from the 21.52828 levels.

Bullish Scenario:

The bullish scenario on the daily chart is possible with a double bottom from the chart to push the price higher for an uptrend, and a close above the resistance of 21.49836 will give room for more buying pressure.

Bearish Scenario:

A bearish general scenario on the weekly time frame may continue if the price fails to close above the 21.49303 levels, and the bears can push lower to another.  

Conclusion

The USDXN pair is not trending well, looking at the four-hour time frame due to the U.S. election coming soon; therefore, the market’s uncertainty affects the pair as traders, investors, and top crypto brokers want to have safe trades.

 

James is based in London ( United Kingdom )
He has been a professional trader for over 5 years.
Currently, he works as forex analyst for different investment companies, and also the main author at USBinaryOptions.com
James S. Martin
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