USDMXN – Weekly Outlook- September 5 2019

USDMXN Outlook & Technical Analysis for Nadex.com

Introduction

The new month ushers in an increase in selling pressure showing a bullish come back for the Mexican Peso on Nadex binary options platform that offer the USDMXN currency pair for clients.

Let’s move on to identify the technical and fundamental drivers of the USDMXN exchange rate.

Mexico Consumer Confidence 

Consumer Confidence which is a predictive economic indicator evaluates the level of confidence consumers hold in economic activity. The index can forecast consumer expenditure, which performs a crucial purpose in overall economic activity.

A reading which is higher than expected is usually considered as bullish or positive for the Peso, while a lower than anticipated index should be considered negative or bearish for the MXN.

Most recent data shows previous reading to be 106.1 while the actual reading was 105.1 signaling a bearish sentiment for the Peso.

U.S. Unemployment Rate

The Unemployment Rate calculates the percentage sum of the number of members of the workforce who are not employed but actively looking for employment in the closing month.

Any reading that is higher than expected should be considered bearish or negative for the currency, while a reading lower than expected should be regarded as bullish or positive for the U.S dollar.

Data released most recently shows the previous, actual, and forecast readings to be 3.7%, suggesting a slightly negative forecast for the USD.

USDMXN Technical

USDMXN Long term Projection: Bullish Swings

Beginning with a monthly chart overview is the best way to go towards analyzing any asset class, as it gives us a bird’s eye view of the price dynamics. 

USDMXN Monthly Chart

USDMXN Outlook - Monthly chart- September 5 2019

After establishing sound support at 18.74686 from an accumulation of buyers, the Mexican Peso failed to increase in strength. As a result, the price hovers above the significant support level before a surge in buy orders above the 19.36438 resistance.

At an opening price in September, the pair corrected the USD gains by 1.78% at press time.

USDMXN Weekly Chart

USDMXN Outlook - Weekly chart- September 5 2019

The above weekly chart shows rejection of selling pressure on June 24 and August 05, the early entry setups for a price rally.

A transition from bearish resistance July 08 ‘19 to bullish support on July 22 ’19 hint on a change in polarity and a potential surge in dollar to pesos exchange rate.

USDMXN Medium Term Projections: 

Daily Time Frame

USDMXN Outlook - Daily chart- September 5 2019

While the USDMXN price chart established new highs, the Relative Strength Index setup lower highs, an indication of Regular bearish divergence.

A collection of buy orders initialized the price rally from this time frame at July 30 ’19 for a price increase of about 6.15% before the breakdown of hidden support 20.03650.

4HR Chart

The series of bullish closing bars at the latter part of the daily time frame is built from a hidden bullish divergence pattern on August 26 ’19 after the pair exited the overbought area on August 25 20:00. 

From the overbought area, the RSI oscillator continued to set up lower highs, while the USDMXN price established higher highs till August 30 where a bull trap price pattern was flagged.

At press time, the price has crashed south in favor of the Mexican peso by roughly 1.73% from the second bull trap price pattern on September 02 16:00.

USDMXN Short Term Projections: 

USDMXN 1HR Intraday Chart

Rounding up with the intraday 1hour time frame, the USDMXN entered a 1.59% bearish trend starting from a breakdown of the bullish inside bar on September 03 06:00 and a collapse of double bullish support on September 03 15:00.

Conclusion

The increase in selling pressure on the mid-term time frames may last throughout this week as there are no bullish patterns to end the price decline. A view from the long term, on the other hand, shows bullish sentiment that could move towards the 20.65754 resistance of December 03 ’18, if the mid-term time frames support a price hike.

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