USD/MXN Forecast: January 2019 | DailyForex


USD/MXN

The US dollar has fallen in the late part of December against the Mexican peso, as we have seen US dollar strength dissipate after a less than hawkish Federal Reserve statement. Now that we are below the 20 pesos level, I think that we may go looking towards lower pricing. I believe that the 20 pesos level is an area of major resistance, and that signs of exhaustion in that area should be sold. You can see that I have a rising wedge that is marked on the chart that we have clearly broken through. That’s normally a very bearish sign and as a general rule you try to reach the bottom of that wedge.

It is because of this that I think we will probably fall to the 19.25 pesos level after a short pull back, and then a break down below there could send the market looking towards the 19 pesos level, and then of course the uptrend line which is somewhere closer to the 18.65 pesos level. I think this is a simple pull back in and uptrend though, and I do think that longer-term we will return to the bullish pressure in this market, as the new Mexican government may be a bit quick and loose with spending.

Beyond that, we are starting to see a little bit of stability in the oil markets, and that helps the Mexican peso as it is highly levered to the crude oil coming out of the Gulf of Mexico. I think we are simply looking for a bit of a pullback early in the month, and then a bounce a couple weeks into 2019. Keep in mind that this pair does tend to trade most volume in the North American session, so be cautious about when you enter the market.

USDMXN



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