USD/MXN Highlights:
- USD/MXN sideways meander keeps it in play for continuation
- Support levels need to hold on any dives lower from here
USD/MXN sideways meander keeps it in play for continuation
USD/MXN hasn’t been a very exciting place for traders to be, as it continues to digest the incredible run-up during the first quarter. At some point though that will change as a breakout to either side becomes virtually inevitable.
At this time the upside still looks appears to be the most likely path with the trend pointed higher and sellers having a hard time reversing the uptrend (similarly to USD/ZAR). But downside levels are going to need to hold. Just as is the case with ZAR, MXN is coiling to towards a potential apex of a wedge.
If price dips below 23.64 then the wedge scenario comes off the board, but it doesn’t mean the pair will fall apart. The floor is seen as 22.83, a swing-low created in March. A break below that point would warrant a cautious, if not outright bearish outlook.
In the event support continues to hold, then a break outside of the wedge is needed to get USD/MXN rolling higher again. The size of the congestion pattern implies we could see a move to 29/30 on the next run. For now, traders will likely be best served awaiting better directional cues and avoiding getting chopped up amidst the range.
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USD/MXN Daily Chart (congestion pattern continues…)
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