USDMXN slips to lowest close since March 10th
US Dollar/Mexican Peso (USDMXN) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
USDMXN finished Wednesday at 20.947 losing 212 pips (-1.0%). Today's close at 20.947 marks the lowest recorded closing price since March 10th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 20.959, the forex pair confirmed its breakout through the prior session low after trading up to 39 pips below it intraday.
Daily Candlestick Chart (USDMXN as at Sep 16, 2020):
Wednesday's trading range has been 263 pips (1.24%), that's slightly above the last trading month's daily average range of 260 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for USDMXN.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle.
After having been unable to move lower than 20.959 in the previous session, the pair found buyers again around the same price level today at 20.920. The last time this happened on September 11th, USDMXN actually lost -0.92% on the following trading day.
Crossing below the lower Bollinger Band for the first time since Monday, prices have shown unusually strong downward momentum in the short-term. This might either indicate a potential selling climax after which prices could head back up towards the mean of the Bollinger Bands at 21.651 or signal the beginning of a strong momentum breakout leading to even lower prices.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Bottom Pattern" stand out. Its common bullish interpretation has been confirmed for USD/MXN. Out of 74 times, USDMXN closed higher 60.81% 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 60.81% with an average market move of 0.43%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 0.61% and NZDUSD closing 0.27% higher. On the flipside the worst performers have been USDJPY closing -0.47% lower and EURUSD losing -0.25%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPPLN surging 0.81% and ZARJPY closing 0.78% higher. The worst performers of the day have been EURZAR tanking -1.42% and CHFZAR closing -1.28% lower. Read more