USD/MXN collapses at 21.81, Goldman's brave bet

Closing Friday's trading session, USD/MXN traded at 21.49, down -1.39% on the day, having posted a daily high at 21.83 and low at 21.47.

Goldman Sachs' Mexican peso view 

Bloomberg reports, "Against the most 'Trumpian' of odds, Goldman Sachs Group Inc. is defying bearish bets and predicting Mexico’s peso will make a comeback this year. The worst performer among the world’s 16 major currencies so far in 2017 will rally 13 percent to 19 per dollar over the next 12 months on the view that the protectionist impact of the new U.S. administration will be less severe than the rhetoric of President-elect Donald Trump. The currency touched a record low of 22.04 per dollar this week after he reiterated during a press conference that Mexico would be paying for a border wall and that companies that relocate operations there would have to pay a border tax."

USD/MXN Technical Levels

To the upside, the peso says goodbye for now to important resistance levels: 21.58/60 zone (previous triple top resistance; Jan. 2016), then 21.80/85 (Right Shoulder from a technical Head and Shoulders pattern). To the downside, if prices close and open below its 50 SMA (blue color) would open doors for a fallen angel (non-stop correction) towards a previous congestion zone and support; 21.18/20. At this point, the worst-case is similar consolidation phase and continuation reverting to the mean all the way to 20.60 and lower. 


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