US DOLLAR TO MEXICAN PESO FORECAST: USD/MXN PRICE RESUMES EXPLOSIVE BREAKOUT AS OIL ROUT DEEPENS
- USD/MXN price action has skyrocketed 6% since Thursday’s trading session as crude oil continues to bleed lower
- The Mexican Peso could come under further selling pressure and push USD/MXN back above the 25.000 handle
- Spot USD/MXN remains about 5% below its recent swing high following the recent US Dollar pullback
USD/MXN has gained roughly 4% so far on Monday to trade back above the 24.000 price. The latest surge in the US Dollar relative to the Mexican Peso – a top emerging market currency pair – mirrors another plunge in crude oil.
USD/MXN & CRUDE OIL PRICE CHART: 4-HOUR TIME FRAME (19 FEBRUARY TO 30 MARCH 2020)
Chart created by @RichDvorakFX with TradingView
Since Thursday, spot USD/MXN price action has climbed by more than 6% while crude oil has crumbled about 20% from their respective intraday low and high. A strong inverse relationship between USD/MXN and crude oil has been observable throughout most of the year, which will likely continue over the short and medium term considering the macroeconomic backdrop.
USD/MXN PRICE CHART: 4-HOUR TIME FRAME (28 FEBRUARY TO 30 MARCH 2020)
That said, a healthy pullback in the US Dollar to Mexican Peso could be over as USD/MXN looks to extend its parabolic climb. This follows a support bounce off the 23.000 price mark – a technical level of confluence coinciding with the 38.2% Fibonnaci retracement of the month-to-date trading range recorded by USD/MXN.
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— Written by Rich Dvorak, Junior Analyst for DailyFX.com
Connect with @RichDvorakFX on Twitter for real-time market insight
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