With the ECB cutting rates and surprising the markets with the more dovish QE announcement, one would expect EUR pairs to be near their lows.  However roughly a half hour after the EUR selloff, many of the EUR pairs reversed and went bid.  The EUR/USD was one of those pairs that reversed, which caused DXY to also reverse back to levels prior to the announcement.  Therefore, many EUR and USD pairs put in reversal candles on daily timeframes:

EUR/USD

AUD/USD

EUR/NZD

However, none seemed to have had quite as large of a possible reversal signal as the EUR/MXN, which put in a hammer near the bottom of the 2019 trading range on a daily timeframe.

The pair has been trading in a falling wedge for the last week, as seen on a 240 min timeframe.  Today, the pair put in a false breakdown into a support zone. It then proceeded to bounce out of the support area and test the upper end of the falling wedge. 

If the hammer on the daily is any indication of a potential reversal, EUR/MXN may be ready to break out of the wedge.  The target for the breakout of a wedge is a 100% retracement of the entire wedge, which is 21.82.  First resistance comes in at 21.59 (horizontal resistance).  First support is today’s lows at 21.45.  Below that, support is the horizontal channel line at 21.07.

Data for Europe and Mexico is light tomorrow.  Pending any unexpected headlines or tweets,  EUR/MXN many continue to trade off technicals into the weekend.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD tension remains elevated ahead of the Fed

EUR/USD is trading around 1.1050, confined to a narrow range ahead of the all-important Fed decision. Chair Powell is set to cut rates by 25bps but signal no further stimulus is on the cards.

EUR/USD News

GBP/USD recovers within range

The GBP/USD pair is posting a modest advance after Wall Street’s opening as demand for the greenback is limited ahead of the US Federal Reserve decision. Poor UK inflation figures contain advances.

GBP/USD News

USD/JPY holds on to recovery gains above 108.00 ahead of Fed

Not only upbeat trade numbers from Japan but upbeat trade/political headlines also help the USD/JPY pair to remain firm around 108.20 prior to Wednesday’s European session. Focus on FOMC decision.

USD/JPY News

Top 3 price prediction Bitcoin, Ripple, Ethereum: Cryptos seeing multiple launches into the universe

The Altcoin market has quickly confirmed Tuesday’s analysis with flashing rises in the last 24 hours. The two eternal aspirants to lead the crypto market – Ethereum and XRP – are rising sharply against Bitcoin and increasing its value rapidly.

Read more

Gold: Pivots around $1500 mark, awaits FOMC policy update

Gold extended its sideways consolidative price action through the early European session on Wednesday and was seen pivoting around the key $1500 psychological mark, awaiting FOMC policy decision.

Gold News

Forex Majors

Cryptocurrencies

Signatures