USDMXN pushes through key technical resistance level
US Dollar/Mexican Peso (USDMXN) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, USDMXN finished the month -3.19% lower at 22.277 after gaining 254 pips (1.15%) today on high volume. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Thursday's high at 22.241, the forex pair confirmed its breakout through the prior session high after trading up to 58 pips above it intraday.
Daily Candlestick Chart (USDMXN as at Jul 31, 2020):
Friday's trading range has been 321 pips (1.46%), that's slightly above the last trading month's daily average range of 300 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 USDMXN.
One bullish candlestick pattern matches today's price action, the White Candle. The last time a White Candle showed up on July 23rd, USDMXN actually lost -0.96% on the following trading day.
Buyers managed to take out the key technical resistance level at 22.255 (now S1), which is likely to act as support going forward. After having been unable to move lower than 21.956 in the previous session, the market found buyers again around the same price level today at 21.978.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying might speed up should prices move above the nearby swing high at 22.625 where further buy stops could get triggered.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Up Move" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for USD/MXN. Out of 329 times, USDMXN closed lower 56.23% of the time on the next trading day after the market condition occurred.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are NZDUSD losing -1.04% and AUDUSD closing -0.72% lower. On the flipside the best performers have been USDJPY closing 1.12% higher and USDCHF gaining 0.48%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 1.87% and GBPZAR closing 1.79% higher. The worst performers of the day have been NZDCAD tanking -1.15% and NZDHKD closing -1.05% lower. Read more