Dollar vs Mexican Peso Price Outlook: USD/MXN Breakout Brewing

Mexican Peso Technical Price Outlook: USD/MXN Near-term Trade Levels

  • Mexican Peso updated technical trade levels – Daily & Intraday Charts
  • USD/MXN trading at near-term support into the start of the week
  • Risk for topside exhaustion ahead of 22.8178– critical support 22.1495

The US Dollar is unchanged against the Mexican Peso early in the week with USD/MXN trading just above near-term technical support. Price has continued to trade within the confines of a multi-week descending pattern and rebounds may be limited while within this formation. These are the updated targets and invalidation levels that matter on the USD/MXN technical price charts. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Peso trade setup and more.

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Mexican Peso Price Chart – USD/MXN Daily

Mexican Peso Price Chart - USD/MXN Daily - Dollar vs Peso Trade Outlook - Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; USD/MXN on Tradingview

Technical Outlook: In my last Mexican Peso Price Outlook we noted that USD/MXN had rebounded off key near-term support and to, “be on the lookout for possible topside exhaustion near downtrend resistance IF price is indeed heading lower,” with, “22.8176 & 22.9425 – both levels of interest.” The recovery registered a high at 22.8983 last week before faltering with the subsequent pullback trading just above median-line support early in the week.

Critical support remains at the 2017 swing high / 61.8% retracement at 22.0376/1350 – note that this threshold also defines the July opening-range lows and a break / close below is needed to mark resumption of the broader downtrend. Daily resistance stands at 22.8178 backed by the monthly open at 22.9773– broader bearish invalidation steady at 23.1089.

Mexican Peso Price Chart – USD/MXN 120min

Mexican Peso Price Chart - USD/MXN 120min - Dollar vs Peso Trade Outlook - Technical Forecast

Notes: A closer look at Peso price action shows USD/MXN trading within the confines of a descending pitchfork formation extending off the June highs. A reversal off the upper parallel on Friday has price trading at near-term support into the start of the week at 22.4005/4378. Initial resistance stands with the upper parallel with a break lower from here exposing the 61.8% Fibonacci extension at 22.2322 and confluence support at 22.1495/1348– look for a larger reaction there IF reached.

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USD Forecast

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Bottom line: USD/MXN is trading at near-term support early in the week. From a trading standpoint, look for topside exhaustion ahead of the upper parallel IF price is indeed heading lower with a break below the 22.1495 needed to fuel the next leg lower in price. Ultimately, a breach above the July opening-range highs would be needed to shift the broader focus back to the long-side.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

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— Written by Michael Boutros, Technical Strategist with DailyFX

Follow Michael on Twitter @MBForex

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