Over the last four trading sessions, the USD/MXN pair has dropped more than 1.5% in favor of the Mexican peso as the U.S. dollar continues to weaken in the short term. The index that measures the strength of the U.S. dollar (DXY) remains consistently below the 100-point level, highlighting the broad weakness of the currency. This has, in part, allowed the current bullish bias of the Mexican peso to persist over the short term.
Downtrend Remains Intact
Since the early days of April, selling pressure has been strong enough to sustain a steady downtrend. However, as the price continues to fall, notable signs of neutrality have started to emerge, which could pave the way for short-term bullish corrections as bearish momentum begins to show signs of exhaustion.
RSI
Lower lows in USD/MXN and higher lows in the RSI have generated a bullish divergence in the short term, suggesting a persistent price imbalance and potential loss of bearish strength in recent sessions. This could open the door for buying corrections to materialize in the upcoming trading sessions.
TRIX
The TRIX line remains oscillating below the 0 level, indicating that the dominant bias over the past few weeks is still bearish. However, if the line continues to flatten, it may signal a possible pause in recent selling momentum.
Key Levels to Watch:
Written by Julian Pineda, CFA – Market Analyst
Downtrend Remains Intact
Since the early days of April, selling pressure has been strong enough to sustain a steady downtrend. However, as the price continues to fall, notable signs of neutrality have started to emerge, which could pave the way for short-term bullish corrections as bearish momentum begins to show signs of exhaustion.
RSI
Lower lows in USD/MXN and higher lows in the RSI have generated a bullish divergence in the short term, suggesting a persistent price imbalance and potential loss of bearish strength in recent sessions. This could open the door for buying corrections to materialize in the upcoming trading sessions.
TRIX
The TRIX line remains oscillating below the 0 level, indicating that the dominant bias over the past few weeks is still bearish. However, if the line continues to flatten, it may signal a possible pause in recent selling momentum.
Key Levels to Watch:
- 19.24: A near-term indecision zone that may act as a barrier for potential buying corrections.
- 19.00: A key support level aligned with an important psychological zone. Price movement below this level could provide further room for the current bearish pattern to continue.
- 19.70: A critical resistance level, corresponding to the highest point of the past two months. A move back toward this area could signal the end of the current downtrend.
Written by Julian Pineda, CFA – Market Analyst
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.