USDMXN – Testing Key Level
1st March 2017
USDMXN was in a broad up trend throughout 2016 with an acceleration after Trump’s election. But profit taking has been the dominant feature since January’s peak above 22.0000 and last week’s decline took prices below the 21 week moving average.
That point was breached last October and August but trading below that point was temporary and limited. Will this USDMXN break be more permanent?
The key we feel is the weekly Marabuzo line that was created in the week of the US election and which comes in at 19.9280. This is a key level and that is almost exactly where the USDMXN downside stalled last week. This week’s price action has been of fluctuation around the line and has yet to confirm or refute the move below.
RSI indicators are now negative and so the technical evidence is mounting for an even deeper correction. The move is enough for us to turn our medium term Trend Table outlook to Neutral but only a weekly close below the Marabuzo line would lead to a Cautiously Negative USDMXN bias with scope back to 19.0230.
