USD/MXN Price Analysis: Bears flirt with 17.80 confluence resistance-turned-support


  • USD/MXN oscillates in a narrow trading band near a one-week trough touched on Wednesday.
  • The mixed technical setup warrants caution for bears and before positioning for deeper losses.
  • A sustained strngth beyond the 38.2% Fibo. level will set the stage for some maningful upside. 

The USD/MXN pair trades on the backfoot during the Asian session on Wednesday and consolidates its recent losses to over a one-week low touched the previous day. Spot prices currently trade around the 17.80 region, down 0.10% for the day, flirting with a confluence resistance breakpoint comprising the 200-day Simple Moving Average (SMA) and a multi-month-old descending trend-line.

Meanwhile, technical indicators on the daily chart have been retreating from higher levels, though manage to hold in the positive territory. This makes it prudent to wait for a convincing break below the aforementioned resistance-turned-support before positioning for an extension of the recent pullback from mid-18.00s, or the highest level since late March touched last week. Some follow-through selling below the 17.65 zone, representing the 23.6% Fibonacci retracement level of the fall witnessed in July, will shift the near-term bias for the USD/MXN pair back in favour of bearish traders.

Spot prices might then accelerate the fall to the 17.40-17.35 horizontal support before dropping further towards the 17.15-17.10 intermediate support. The downward trajectory could get extended and drag the USD/MXN pair to the 16.90-16.85 area and the multi-year low, around the 16.65-16.60 region touched in July.

On the flip side, the 18.00 round figure now seems to act as an immediate hurdle ahead of the 18.15-18.20 zone. This is followed by 38.2% Fibo., around the 18.30 region and mid-18.00s, or the monthly. A sustained strength beyond will set the stage for the resumption of the recent appreciating move witnessed over the past month or so and lift the USD/MXN pair to the 18.80-18.85 area, representing 50% Fibo. level.

USD/MXN daily chart

fxsoriginal

Techincal levels to watch

USD/MXN

Overview
Today last price 17.8166
Today Daily Change -0.0178
Today Daily Change % -0.10
Today daily open 17.8344
 
Trends
Daily SMA20 17.5817
Daily SMA50 17.2943
Daily SMA100 17.2124
Daily SMA200 17.7823
 
Levels
Previous Daily High 17.9596
Previous Daily Low 17.7861
Previous Weekly High 18.4934
Previous Weekly Low 17.3786
Previous Monthly High 17.8174
Previous Monthly Low 16.9727
Daily Fibonacci 38.2% 17.8524
Daily Fibonacci 61.8% 17.8934
Daily Pivot Point S1 17.7605
Daily Pivot Point S2 17.6866
Daily Pivot Point S3 17.587
Daily Pivot Point R1 17.934
Daily Pivot Point R2 18.0336
Daily Pivot Point R3 18.1075

 

 

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