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There is a strong downward trend in USDMXN
As emerging market currencies make progress against the US dollar.
“As emerging market currencies make progress against the US dollar”
The pair is aiming for support at 17.5000, with major resistance at 17.9492 and 18.2263, and limited potential for upward movement. Despite optimistic data from the US, the USD did not strengthen, causing USDMXN to plummet to a six-year low of 17.7462 during the New York session. As of the time of writing, the USDMXN pair is trading at 17.7480, down 0.92%.
Positive employment reports from the US have improved market sentiment. As a result, high-beta currencies, along with their emerging market counterparts, have risen sharply against the US dollar.
USDMXN price action has been in a strong downward trend, with losses of over 9% since the beginning of the year. In particular, the pair has tested the level below 19.00 for ten days since its drop, but buyers have been unable to break through. Despite no outflow of funds from emerging market currencies, traders continue to short the USDMXN pair.
Momentum indicators such as RSI are maintaining the downward trend, with space for overselling before sellers enter. The three-day ROC has turned downward from a neutral state, as sellers have entered. Therefore, the strongest direction of resistance for USDMXN is downwards.
However, the next support level for USDMXN is 17.5000. If this is broken, the swing low of July 2017, which is 17.4515, will be exposed, and it will then drop to 17.0000.
On the other hand, if USDMXN recovers the daily high of May 5th, 17.9492, it may form a bullish engulfing candle pattern, which could indicate further upward movement.
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