Originally published by AxiTrader
Recently I've been writing about the Mexican peso's strength against the US dollar.
I've explained why I think the explanation for this strength might lay in game theory and poker. And recently I looked at the technical outlook and the USD/MXN four tests of the 200 day moving average over the past year.
But this morning, in the wake of the US dollar's heavy fall last night, it's looking increasingly likely that the peso may be in for a run toward 18.59/60 and perhaps even a full retracement to the 18.15 low on the 9th of November last year when president Trump won the US election.
USD/MXN is up a smidge from when I prepared the above chart at 19.23 at the moment. But it is clear in the chart above that USD/MXN has broken down below both the 200-day moving average and the uptrend line which started with the USD/MXN bull run back in 2014.
These are very big, long term, and important levels. So with prices looking a little oversold in the short term this move lower may be fraught.
But as feedback from traders and the Twitterati on my recent notes on the pesos move have highlighted this is a rally that is persisting but nobody seems to believe in or like. So I'll retain a view that USD/MXN heads toward the 38.2% retracement level of the 2014-2017 rally at 18.59. And if that breaks its back the low of November 9 where I'll be targeting on my shorts.
Have a great day's trading.