USD/MXN Price Analysis: Bulls seeking a discount for higher-highs


  • USD/MXN has spiked to resistance and is now expected to offer a discount to the bulls. 
  • Medium-term resistance is now in focus as the price confirms its intent for higher-recovery-highs in a phase of accumulation. 

The peso has fallen further in the recent trade with a resurgence in the US dollar. 

The following is a top-down analysis to gauge where the next opportunity may come depending on the market structure and price action.

Monthly chart

The peso had enjoyed a bullish trend since supply in the first quarter of 2020. 

However, in recent months, it has given back ground to the US dollar as the greenback attempts to correct.

While there is still room for lower in a phase of accumilation, at least a 38.2% Fibonacci retracement would be expected prior to further downside.

This gives rise to an upside bias on the lower time frames, for now. 

Weekly chart

The weekly chart shows that the price has made a lower low in a correction of the late Jan weekly bullish impulse.

The correction is now expected to result in a new bullish weekly impulse and a higher high. 

A -272% Fibonacci retracement of the correction's range comes in the confluence of the monthly 38.2% Fibo target and the prior support/resistance area. This further cements the bullish bias. 

Daily chart

Tuesday's price action has resulted in a strong bullish candle that has broken old resistance which would now be expected to act as support. 

Bulls will be monitoring for a bullish close above this support on a daily basis to confirm the upside bias. 

4-hour chart

As can be seen, the conditions have flipped bullish on the technical indicators on the 4-hour chart with an 8/21 EMA bullish cross-over and MACD now above zero.

Meanwhile, a Fibonacci retracement from resistance to at least a 38.2% support confluence, or even as deep as the 61.8% confluence, is not out of the question at this juncture.

This would be more than expected following such a spike to resistance and would offer the bulls a discount to reengage in anticipation of higher highs to follow. 

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. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD hovers around 1.1900, retains weekly gains

The EUR/USD pair trades around the 1.19 mark after the Eurozone Q2 Prelim GDP beat estimates with 2% while US PCE inflation rose by less than anticipated in June, printing at 3.5% YoY. Risk-on mood persists.

EUR/USD News

GBP/USD retreats after flirting with 1.4000

GBP/USD retreated from near the 1.4000 level, but the greenback remains away from investors' radar. Optimism over the Brexit issue and the declining trend in new COVID-19 cases in the UK offers support to the pound.

GBP/USD News

XAU/USD slides to $1,820 area, downside seems limited

Gold traded with a mild negative bias around the $1,825 region, or daily lows, during the early North American session, albeit lacked any follow-through selling.

Gold News

Shiba gets listed on eToro as demand for SHIB skyrockets

Leading investment platform eToro has been adding cryptocurrency assets on popular demand from users. The Dogecoin killer recently amassed 600,000 holders despite range-bound price action. 

Read more

NIO shares rise again as Wall Street shrugs off recent China woes

NYSE:NIO added 1.86% as EV and China stocks bounced back again. Nio rides higher as industry leader Tesla gets some major upgrades. Nio rival XPeng releases a refreshed look for its compact SUV.

Read more

Forex MAJORS

Cryptocurrencies

Signatures