- USDMXN testing key pivot resistance- breach to mark larger recovery
- Updated targets & invalidation levels
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Technical Outlook:USD/MXN rebounded off a sliding parallel extending off the 11/3 high this week with the advance failing at confluence resistance at 19.2997- a region defined by the 23.6% retracement of the 2017 range, the lower parallel of the descending pitchfork (blue) & former trendline support extending off the late 2015 lows (red).
A breach above / close above this zone is needed to validate a near-term reversal in the pair with such a scenario targeting 19.5458/6402 backed by 19.9220 & 20.2456– both areas of interest for possible exhaustion / short-entries. Interim support rests with the yearly low-day close at 18.5750 with a break lower eyeing key support at 18.0045-18.15860.
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Notes: A closer look at price action further highlights the reversal off this this near-term resistance confluence with the pullback now testing initial support at 18.8931. From a trading standpoint, I’ll favor fading near-term weakness while above the 18.5750 with a breach higher eyeing subsequent topside objectives- Ultimately I’d be looking to sell a larger-scale recovery towards structural resistance. Keep in mind we have U.S. 1Q GDP & Core PCE figures on tap tomorrow morning.
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Relevant Data Releases
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– Written by Michael Boutros, Currency Strategist with DailyFX