MXNUSD closes lower for the 2nd day in a row
Mexican Peso/US Dollar (MXNUSD) Technical Analysis Report for Jan 24, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, MXNUSD ended the week -0.69% lower at 0.05322 after losing 8 pips (-0.15%) today. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (MXNUSD as at Jan 24, 2020):
Friday's trading range has been 40 pips (0.75%), that's slightly above the last trading month's daily average range of 37 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MXNUSD.
One bullish candlestick pattern matches today's price action, the Hammer. The last time a Hammer showed up on December 3, 2019, MXNUSD gained 0.63% on the following trading day.
Unable to break through the key technical resistance level at 0.05334 (R1), the market closed below it after spiking up to 0.05340 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. After having been unable to move lower than 0.05303 in the prior session, the forex pair found buyers again around the same price level today at 0.05300.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could speed up should prices move below the nearby swing low at 0.05299 where further sell stops might get activated. With prices trading close to this year's low at 0.05255, downside momentum could accelerate should the pair break out to new lows for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for MXN/USD. Out of 425 times, MXNUSD closed lower 56.71% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 51.29% with an average market move of -0.06%.