USD/MXN Forex Signal: Eyeing 19.60 Resistance
Potential Signal:
- I am a buyer of this pair at the 19.61 level, with a stop loss at the 18.95 level.
- I would be taking a profit at the 20.18 level.
The U.S. dollar has shown itself to be strong again during the trading session on Monday, at least against the Mexican peso. With that being said, I think you've got a situation where traders are going to continue to pay close attention to the 19.60 level above, which has been important resistance a couple of times.
With that being the case, I like the idea of trying to find a value on dips, but I also recognize that we have a situation where there are a lot of questions and concerns about the Federal Reserve cutting rates. And because of that, overall, the US dollar has suffered, but the thing is that this is a little bit different in the way of markets due to the fact that the Mexican economy is so heavily dependent on the US economy. And quite frankly, if they cannot strengthen the economy in the United States, it'll be disastrous for Mexico. If traders are concerned about that, they tend not to go out very far on the risk spectrum and that includes Mexico.
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1Technical Analysis
So, we'll have to wait and see. The technical analysis has been very bullish, at least over the last couple of months. And the 50 day EMA is now at the 18.50 pesos level and rising. The 20 pesos level did cause a bit of noise, and I do think that it's probably going to take some effort to get beyond there, but eventually I think we do take that out and continue to go much higher.
Overall, this is a market that is going to continue to be extraordinarily choppy and volatile, but that's nothing new. It's an emerging market currency. That's what they do. With that being said, I remain buy on the dip against the Mexican peso when it comes to the greenback.
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