- USD/MXN fades bounce off one-week low as 50-DMA pushes back bullish bias.
- Bullish candlestick formation, clear bounce off 21-DMA challenges sellers.
- MACD, RSI conditions suggest further grinding towards the south.
- Buyers need successful break of 61.8% Fibonacci retracement for conviction.
USD/MXN takes offers to refresh intraday low near 18.57 during early Thursday, reversing the previous day’s rebound from the 21-DMA.
In doing so, the Mexican Peso (MXN) pair fails to justify Wednesday’s Dragonfly Doji bullish candlestick while dropping back towards the lowest levels since March 13 marked on the previous day.
It’s worth noting that the USD/MXN pair’s failure to cross the 50-DMA during late Wednesday’s corrective bounce keeps the sellers hopeful. Adding strength to the downside bias is the downward-sloping MACD line and the RSI (14) retreat.
As a result, the USD/MXN is likely to drop back to the 21-DMA support of 18.44 before highlighting the 18.30 support.
In a case where the Mexican Peso pair drops below 18.30, the 18.00 threshold could act as the last defense of the bulls before highlighting the odds of witnessing a fresh low since 2017, currently 17.90.
Alternatively, recovery moves need validation from the 50-DMA hurdle of 18.60 to renew upside momentum targeting the 50% and 61.8% Fibonacci retracements of the USD/MXN pair’s fall from December 2022 to March, respectively near 18.90 and 19.15.
Should the USD/MXN pair rises past 19.15, February’s high of 19.30 can challenge the buyers for the one last time.
USD/MXN: Daily chart
Trend: Further downside expected
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.
Recommended content
Editors’ Picks
GBP/USD recovers to 1.3300 ahead of UK Retail Sales data
GBP/USD trades with a positive bias for the third straight day on Friday and hovers near the 1.3300 mark in the European morning on Friday. Traders digest the BoE and Fed policy decisions, awaiting the UK Retail Sales data for further trading impetus.
USD/JPY keeps BoJ-led losses below 142.50, Ueda's presser eyed
USD/JPY remains in the red below 142.50 after the Bank of Japan announced on Friday that it maintained the short-term rate target in the range of 0.15%-0.25%, as widely expected. Governor Ueda's press conference is next in focus.
Gold consolidates weekly gains, with sight on $2,600 and beyond
Gold price is looking to build on the previous day’s rebound early Friday, consolidating weekly gains amid the overnight weakness in the US Dollar alongside the US Treasury bond yields. Traders now await the speeches from US Federal Reserve monetary policymakers for fresh hints on the central bank’s path forward on interest rates.
Shiba Inu is poised for a rally as price action and on-chain metrics signal bullish momentum
Shiba Inu remains strong on Friday after breaking above a symmetrical triangle pattern on Thursday. This breakout signals bullish momentum, further bolstered by a rise in daily new transactions that suggests a potential rally in the coming days.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.