MXNUSD closes above its opening price after recovering from early selling pressure
Mexican Peso/US Dollar (MXNUSD) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
MXNUSD ended the month -3.64% lower at 0.04346 after gaining 9 pips (0.21%) today on high volume. Trading up to 31 pips lower after the open, MXN/USD managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on June 25th, MXNUSD actually lost -1.70% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (MXNUSD as at Jun 30, 2020):
Tuesday's trading range has been 56 pips (1.29%), that's below the last trading month's daily average range of 89 pips. Weekly volatility is also lower, being slightly below 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 Bullish Spinning Top.
Prices are trading close to the key technical resistance level at 0.04374 (R1). After having been unable to move lower than 0.04311 in the prior session, the pair found buyers again around the same price level today at 0.04305.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bullish Intraday Reversal" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for MXN/USD. Out of 465 times, MXNUSD closed lower 49.68% 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 52.47% with an average market move of -0.25%.