- In my daily analysis of the Mexican peso, it's easy to see that the dollar is starting to soften against the peso, but it's worth noting that we are hanging around the 18 pesos level, which of course has a lot of psychology attached to it.
- So because of that, I think that the market continues to be somewhat noisy.
- It's probably worth noting that there is a significant amount of support extending from the 18 pesos level down to the 17.80 pesos level.
It is in that area that you'll start to feel the influence of the 50 day EMA and that of course is something that a lot of traders will pay attention to. For myself the question isn't so much as to whether or not we break down or not, but what I'm focusing on is can and will we stay in the previous consolidation? Perhaps we are in the midst of trying to carve out a new range.
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A New Range Makes Sense
That would make a certain amount of sense considering that interest rates in America continue to be stubbornly high. And at the same time, there are a lot of people out there worried about the Mexican political situation as they have stated certain things like perhaps letting the population vote on the Supreme Court type of scenario.
There's always the corruption and the influence of the cartels that makes people nervous. But at the same time, Mexico is now the largest exporter to the United States. So, the two economies are inexorably tied together to the point where if the US starts to fail, economically speaking, that will devastate Mexico. And then of course, vice versa.
So sometimes this pair will move in the exact opposite direction that you anticipate. With that being said, I'm watching this area closely, and if we can break above the 18.12 level, then I think we are in fact starting to settle into a new trading range.
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