USD/MXN drops at the time of writing as the USDX plunges after ending its temporary rebound. The Dollar Index maintains a bearish outlook, so a further drop weakens the greenback.
Still, a neutral FED tonight could attract the USD buyers into the game. The US has reported good economic data lately, so the dollar could start increasing again in the short term.
Technical Analysis!
Technically, USD/MXN has escaped from a down channel’s body. Breaking above the downtrend line signals a potential upside reversal. Still, this is not enough for us to consider going long as the pressure is still high as long as the USDX stands in the seller’s territory.
The pair has tested and retested the broken downtrend line and now it has registered a new higher high. USD/MXN is pressuring the weekly R1 (19.952). Stabilizing above this static support and registering a jumping above 20.084 high could really signal a bullish reversal.
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