USD/MXN Forecast: USD Pulls Back Against Mexican Peso| MENAFN.COM

Thursday, 08 December 2022 09:51 GMT

USD/MXN Forecast: USD Pulls Back Against Mexican Peso

(MENAFN- Daily Forex) The US dollar initially tried to rally on Wednesday but seems to be struggling just a bit against the Mexican peso, as the 20.18 level has been a little bit of short-term resistance . The 200-day EMA is at the 20.26 level and is more likely than not being watched at the moment. However, the candlestick on Tuesday was rather impulsive, and it's worth noting that over the last several weeks, all of the big candlesticks have been green , suggesting that there is much more aggressive action on the side of buyers.

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It looks as if we will pulled back just a bit, but the 20 pesos level probably brings in a bit of money as it is a large, round, psychologically significant figure. Granted, the Mexican peso is somewhat sensitive to the crude oil markets , but it's also worth noting that most commodities have gotten hammered. While crude oil has been a bit of an outlier, the reality is that the commodity markets give us a bit of a heads-up as to how the global economy may be likely to act.

The market initially shot higher but then pulled back as it suggests that we are going to continue to see a lot of noisy behavior. However, if we can break above the 200-day EMA , then it's likely that we could go to the 20.50 level, where we had seen a lot of selling pressure previously. If we can break above the 20.60 pesos level, then it is likely that we will go higher, perhaps reaching the 21.50 level.

If we were to turn around and breakdown below the 19.82 level, then it's likely that the 19.50 will be a potential target as we have bounced from there previously, and of course, it's an area that will offer quite a bit of noise. Breaking down below that could send the US dollar tumbling, but ultimately, I don't see that happening in this type of environment. This pair does tend to be rather noisy, as so much in the way of remittance transactions and day-to-day business happened across this border. Ultimately, you can look at this more or less as a large range-bound trade that is trying to break to the upside. Expect volatility, but anybody who has traded the Mexican peso before understands this.


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