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.
Before deciding to participate in the financial markets, you should carefully consider your investment objectives, level of experience, and risk appetite. Most importantly, do not invest money you cannot afford to lose. There is considerable exposure to risk in any off-exchange foreign exchange transaction, including, but not limited to, leverage, creditworthiness, limited regulatory protection, and market volatility that may substantially affect the price, or liquidity of a currency pair or financial instrument. Moreover, the leveraged nature of trading means that any market movement will have an equally proportional effect on your deposited funds. This may work against you as well as for you. The possibility exists that you could sustain a total loss of initial margin funds and be required to deposit additional funds to maintain your position. If you fail to meet any margin requirement, your position may be liquidated and you will be responsible for any resulting losses. Trading financial markets on margin carries a high level of risk and may not be suitable for all investors. Past performance is not indicative of future results. Any statements regarding income, whether expressed or implied, do not represent a guarantee. Any opinions, news, research, analysis, prices, or other information provided is deemed general market commentary and for educational purposes only, and does not constitute investment advice or solicitation to buy or sell any contracts or securities or any type.
Editors’ Picks
EUR/USD extends gains above 1.0700, focus on key US data
EUR/USD meets fresh demand and rises toward 1.0750 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
GBP/USD snaps the two-day winning streak above 1.2450, eyes on US GDP data
The GBP/USD pair snaps the two-day winning streak near 1.2460 amid the modest rebound of the US Dollar on Thursday during the early Asian session. The release of the US Gross Domestic Product for the first quarter will take center stage on the day.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Editors’ Picks
EUR/USD extends gains above 1.0700, focus on key US data
EUR/USD meets fresh demand and rises toward 1.0750 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold closes below key $2,318 support, US GDP holds the key
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
US Q1 GDP Preview: Economic growth set to remain firm in, albeit easing from Q4
The United States Gross Domestic Product (GDP) is seen expanding at an annualized rate of 2.5% in Q1. The current resilience of the US economy bolsters the case for a soft landing.
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