USD/MXNTechnical Forecast: Bearish

The Mexican Peso has loved one other good week in opposition to the US Greenback after corrective stress noticed USD/MXN commerce larger after the announcement of the Pfizer vaccine. The pair is now positioned once more simply above the 76.4% Fibonacci retracement degree from the 18.55 – 25.46 surge, a key space sellers might want to break beneath with the intention to consolidate additional draw back momentum.

USD/MXN Every day chart (11 February20 November 2020)

Mexican Peso Technical Forecast: Will Critical Support be Broken?

Given risk-on sentiment was halted at the start of November simply above the 20.00 pesos mark, a sustained break beneath this degree is prone to appeal to extra sellers. The query now could be whether or not the Mexican Peso is ready to get pleasure from a couple of days of relative power with out dealing with a powerful upward reversal. In conditions like current, the place information headline spark speedy strikes, we’re prone to see elevated profit-taking on speculative positions, which might be the motive behind a doable value reversal if we do actually see USD/MXN break beneath 20.00.

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If we flip to the fairness market, we will see that regardless of draw back corrections that occurred mid-week, constructive momentum stays sturdy, alluding to continued risk-on drive which might profit the Peso. In that case, our subsequent value goal will likely be 19.87, beforehand held as a resistance space earlier than the Covid-19 induced surge again in March.

On the flip aspect, if risk-on sentiment falters and we see a brand new upward reversal, quick resistance will be discovered on the descending trendline from the highs again in March, which has lately come again in to play after been damaged to the upside. This implies 20.30 might provide an space for brand new sellers to return in to the market, earlier than specializing in the subsequent resistance ultimately week’s highs round 20.69, adopted by the psychological 21.00 mark, the place the 50-day easy shifting common is now converging.

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— Written by Daniela Sabin Hathorn, Market Analyst

Observe Daniela on Twitter @HathornSabin