- During the trading session on Friday, we have seen the US dollar drop a bit, as the market has been very negative to the US dollar in general.
- All things being equal, it’s probably worth noting that we had just dropped below the 50 Day EMA, so that is a technical signal of negativity.
- Ultimately, this is a pair that does tend to be very choppy, but let’s be honest here, this is a pair that will continue to be very noisy and of course driven by random comments coming out of Washington DC.
Technical Analysis
The technical analysis for this USD/MXN pair is very neutral and has been for a while. With the exception of a couple of weeks ago when we had the wild open after Donald Trump slapped tariffs on Mexico, only to see those tariffs paused. They are not going anywhere yet, so I think this market is more or less going to be in a “wait and see” type of attitude, as there could be a complete reversal of fortune if Mexico doesn’t make Donald Trump happy.
Top Regulated Brokers
At this point in time, the 20 MXN level I think ends up being a massive support level, as it is a large, round, psychologically significant figure, and an area that we see buying at previously more than once. If we were to break down below there, then we could see the market go looking to the 200 Day EMA underneath there, which is closer to the 19.55 MXN level. On the other side of the trade, if we can break above the 20.60 level, then I think we will threaten the 21 MXN level on the upside, as that has been the ceiling for quite some time.
I think at this point in time you have to be very cautious, and we will have to wait and see whether or not some type of permanent agreement between the Americans and the Mexicans come to fruition, because if it does then it’s likely that we would see a little bit of weakness here.
Ready to trade our daily Forex forecast? Here’s a list of some of the top Mexican forex brokers to choose from.