US Dollar to Mexican Peso Extends Parabolic Climb

0


USD/MXN PRICE FORECAST: US DOLLAR TO MEXICAN PESO BREAKOUT GOES VERTICAL

  • USD/MXN eclipsed the 25.000 price as the Mexican Peso plunged further against the US Dollar after Banxico slashed benchmark interest rates to match recent FOMC action
  • Spot USD/MXN is trading at record high readings largely due to the crude oil price war and coronavirus pandemic
  • The US Dollar might appear overextended versus the Mexican Peso, but USD/MXN could continue pressing higher while recession risk looms

The US Dollar has recorded a staggering 30% surge against the Mexican Peso since USD/MXN bottomed out mid-February around the 18.500 price. Spot USD/MXN now trades well above the 25.000 handle as the Mexican Peso, a top emerging market currency, crumbles as the US Dollar, a popular safe-haven currency, skyrockets.

Top Trading Opportunities in 2020

Top Trading Opportunities in 2020

Recommended by Rich Dvorak

Check out our latest Top Trading Opportunities

USD/MXN PIERCES 25.000 PRICE AS MEXICAN PESO IMPLODES VS US DOLLAR

USDMXN Price Chart US Dollar to Mexican Peso Technical Analysis

USD/MXN has staged a confounding rebound over the last few weeks since the most liquid and heavily traded EM FX pair notched a 16-month low in early February. In fact, USD/MXN is currently trading at its highest reading on record.

Forex for Beginners

Forex for Beginners

Recommended by Rich Dvorak

Discover the basics of forex trading

The monumental rise in USD/MXN might seem a bit overextended, however, considering spot prices are pressing technical resistance presented by the 3-standard deviation Bollinger Band upper barrier. Also, USD/MXN might gravitate back lower around technical confluence underscored by the 161.8% Fibonacci extension of the January 2017 to July 2017 bearish leg.

USD/MXN PRICE SURGE FOLLOWS PLUNGE IN CRUDE OIL & RISE IN RECESSION RISK AMID CORONAVIRUS PANDEMIC

USDMXN Price Chart Crude Oil Correlation Mexican Peso

Chart created by @RichDvorakFX with TradingView

That said, fundamental drivers like the crude oil price war and rise in recession risk could continue fueling the parabolic climb in USD/MXN. The Mexican Peso, which is closely tied to the price of oil, has crumbled as the collapse in crude oil pressures Pemex – Mexico’s state-owned oil company.

Introduction to Forex News Trading

Introduction to Forex News Trading

Recommended by Rich Dvorak

Learn how to analyze and react to market news in real-time

At the same time, extremely high readings of FX volatility have largely bolstered the US Dollar as coronavirus concerns plague market sentiment.

USD/MXN PRICE CHART: 4-HOUR TIME FRAME (FEBRUARY 27 TO MARCH 23, 2020)

USD MXN Price Chart US Dollar to Mexican Peso Forecast

As such, USD/MXN has potential to keep churning higher within its upward-sloping bullish channel extended through the ongoing series of higher highs and higher lows. Also, the 9-period and 34-period exponential moving averages on the 4-hour USD/MXN price chart reveal the short-term and medium-term uptrend, which could continue supporting the US Dollar relative to the Mexican Peso.

— Written by Rich Dvorak, Junior Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight





Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here