- Important moving averages to limit near-term momentum after the latest downpour.
- RSI pattern favors bears but broad triangle formation can keep prices under check.
Following its gap down opening on Monday, which dragged the quote beneath 200-day SMA, the USD/MXN bounced off 100-day simple moving average (SMA) and is currently trading between the same region as it clocks 19.2203 ahead of the European session open on Tuesday.
While 100-day SMA level of 19.1418 and 19.3634 mark comprising 200-day SMA seem restricting the pair’s immediate momentum, 14-day relative strength index (RSI) is gradually declining from the overbought area favors price pullback.
In addition to 19.1418, 61.8% Fibonacci retracement of its April – June 2018 rally at 19.0912 acts as an extra buffer to the pair’s slump to May month low around 18.9343.
Alternatively, 50% Fibonacci retracement level of 19.4471 and March month top surrounding 19.6225 seem buyers’ landmarks past-19.3634.
It should also be noted that a year-long symmetrical triangle formation may confine the pair’s wild moves over/beneath aforementioned levels.
USD/MXN daily chart
Trend: Sideways
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