USDMXN breaks below Thursday's low
US Dollar/Mexican Peso (USDMXN) Technical Analysis Report for Jul 03, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, USDMXN ended the week -2.88% lower at 22.389 after losing 90 pips (-0.4%) today on low volume. Trading 118 pips higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Thursday's low at 22.402, the currency confirmed its breakout through the prior session low after trading up to 26 pips below it intraday.
Daily Candlestick Chart (USDMXN as at Jul 03, 2020):
Friday's trading range has been 222 pips (0.99%), that's far below the last trading month's daily average range of 445 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 USDMXN.
The forex pair closed below the 20-day moving average at 22.479 for the first time since June 15th. After having been unable to move lower than 22.402 in the previous session, the pair found buyers again around the same price level today at 22.376. The last time this happened on Tuesday, USDMXN actually lost -1.49% on the following trading day.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling might accelerate should prices move below the close-by swing low at 22.285 where further sell stops could get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for USD/MXN. Out of 82 times, USDMXN closed higher 57.32% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 53.66% with an average market move of 0.63%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are NZDUSD gaining 0.35% and AUDUSD closing 0.2% higher. On the flipside the worst performers have been USDCAD closing -0.1% lower and USDCHF losing -0.01%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been EURHUF surging 0.57% and USDHUF closing 0.44% higher. The worst performers of the day have been USDNOK tanking -0.6% and EURNOK closing -0.51% lower. Read more