The Trump Trade: Profiting on the MXN, RUB and CHN

The USDMXN is one of my favorite currency pairs because of its technical behavior. Traders with a reasonable eye for support, resistance, trendlines, and price action will see its patterns and predictability.

Furthermore, what makes the USDMXN more appealing is the fact that it offers a significant yield opportunity against the USD. Current rates favor MXN (4.25%) vs. USD (.25-.50%). Holding a USDMXN SELL will offer positive rollover or positive interest, but obviously you want the trade to move in the proper direction as well. Considered an exotic pair, the USDMXN is not a trade that you want to fight. So look for the structural alignments and clean setups, and it becomes very tradable. I would love to see a topping formation on the USDMXN for a massive carry trade opportunity (See Figure 3). It definitely requires some confirmation and a bearish breakdown on the U.S. Dollar Index (DXY), but if we see the alignments, the profit potential is amazing.