MXNUSD breaks below key technical support level
Mexican Peso/US Dollar (MXNUSD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, MXNUSD finished the month 3.29% higher at 0.04489 after losing 52 pips (-1.15%) today on high volume. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 0.04496, the FX pair confirmed its breakout through the prior session low after trading up to 11 pips below it intraday.
Daily Candlestick Chart (MXNUSD as at Jul 31, 2020):
Friday's trading range has been 65 pips (1.43%), that's slightly above the last trading month's daily average range of 60 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MXNUSD.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on July 23rd, MXNUSD actually gained 0.99% on the following trading day.
Prices broke below the key technical support level at 0.04507 (now R1), which is likely to act as resistance going forward. After having been unable to move above 0.04555 in the previous session, MXN/USD ran into sellers again around the same price level today, missing to move higher than 0.04550.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) below 20" stand out. Its common bullish interpretation has been confirmed for MXN/USD. Out of 294 times, MXNUSD closed higher 55.78% of the time on the next trading day after the market condition occurred.