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Mexican Peso/US Dollar

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MXNUSD trade ideas

USDMXN Approaching Resistance – Potential for Short-Term DropOANDA:USDMXN is approaching a key resistance level, a zone where sellers have previously stepped in to drive prices lower. If the resistance holds and a rejection occurs, the market could see a short-term pullback toward the 20.62025 level, a logical target based on recent price swings and momentum shifts. Traders should watch for confirmation patterns such as bearish candlesticks or rejection wicks at the resistance level. This could signal a potential move lower. Conversely, a break above this resistance would invalidate the bearish scenario and could indicate continued bullish momentum. This setup presents a potential short-term opportunity. Feel free to share your insights or alternate perspectives in the comments below!
Short
by DanieIM
3
Mexican Peso Holds Strong Amid Adverse DataThe Mexican peso is managing to hold strong in a key trading session, showing relative stability amid growing economic uncertainty. However, recent Gross Domestic Product (GDP) data from Mexico paints a slowing growth picture, raising serious concerns about the currency’s medium- and long-term outlook. While the peso has managed to remain relatively stable against the U.S. dollar, even showing gains, this resilience could be an illusion. The 0.6% GDP contraction in the fourth quarter of 2024, combined with an annual growth rate of just 0.6%, reveals a weakening of the Mexican economy, especially in the primary and industrial sectors. The peso’s stability is mainly a reflection of the weakness of the U.S. dollar across the board during the session. The GDP contraction in the last quarter and the slowing annual growth are undoubtedly warning signs that cannot be ignored. External factors also play a crucial role in the peso’s performance. U.S. economic data, from Mexico’s largest trading partner, could put pressure on the currency. U.S. GDP growth in 2024 stood at 2.3%, a pace of expansion that has slowed in the last quarter, somewhat weakening the narrative of U.S. economic exceptionalism that dominated the first half of January. Naturally, a slower economic expansion in the U.S. could have additional indirect implications for the Mexican economy. Additionally, we cannot rule out the impact of a more aggressive monetary easing policy next week from Banco de México, which could adopt a more “dovish” stance in response to economic slowdown. Another risk factor for the peso is the potential imposition of tariffs by the U.S. on Mexican products. The implementation of these tariffs could have a significant negative impact on the Mexican economy and trigger a greater depreciation of the peso. The threat of tariffs is an uncertainty factor that weighs on the peso. While we hope it does not materialize, we cannot underestimate its potential impact on the Mexican economy and market confidence. In this context, the Mexican peso is at a crossroads. While the short-term stability of the MXN is a sign of resilience, both internal and external risks could test the currency’s strength in the coming weeks and months. The evolution of the U.S. economy, Banco de México’s monetary policy, and the threat of tariffs will be key factors to monitor closely. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
by Pepperstone
1
USD/MXN breaks trend line ahead of Trump speechThe USD/MXN has broken its bullish trend line, and has now moved back below the key 20.500 level. Is this a turn in the tide? The Mexican peso has enjoyed a relief rally along with other risk assets in the last few days, but whether or not it can rise further will depend partly on any new tariff announcements from Trump, and their scale... Trump's Speech at Davos in Focus: Tariffs and Taxation on the Horizon? Trump’s highly anticipated address at the World Economic Forum in Davos at 11:00 AM ET is set to grab the market’s attention. Investors will be closely analysing his comments for any further signals on tariffs, economic policies, and international tax matters. While Trump has refrained from imposing blanket tariffs so far, he’s kept the market guessing with his mentions of potential tariffs targeting Canada, Mexico, Europe, and China. However, no firm decisions have been made yet, leaving investors in a holding pattern as they await further clarification on his stance. Jobless Claims Rise: Softening Signs in the Labour Market? On the economic data front, US jobless claims came in higher than expected at 223K, up from 217K the previous week, and above the forecast of 220K. This marks the second consecutive week that claims have risen more than anticipated, suggesting a potential softening in the jobs market, at least in the near term. The slight uptick in claims could raise questions about the strength of the labour market and add to market uncertainty as traders await more data and policy direction. By Fawad Razaqzada, market analyst with FOREX.com
Short
by FOREXcom
USD/MXN: Is the Uptrend Breaking?Chart Analysis: USD/MXN has broken below a key ascending trendline (blue), suggesting potential weakening in the bullish momentum observed since mid-2024. 1️⃣ Key Support Breakdown: The pair closed below the ascending trendline at 20.25, signaling potential bearish pressure. The next key support lies near 20.00, a psychological level and a significant horizontal zone. 2️⃣ Moving Averages: 50-day SMA (blue): At 20.38, acting as dynamic resistance following the breakdown. 200-day SMA (red): Positioned lower at 19.05, confirming a longer-term bullish structure remains intact despite recent weakness. 3️⃣ Momentum Indicators: RSI: At 43.19, showing bearish momentum but not yet oversold. MACD: Hovering near the zero line with a slight bearish crossover, indicating waning upward momentum. What to Watch: A sustained move below 20.00 could confirm a deeper bearish correction toward the 200-day SMA. A recovery back above the trendline and 20.38 could invalidate the bearish breakout and signal a continuation of the bullish trend. USD/MXN's near-term direction hinges on its ability to either hold above 20.00 or reclaim the broken trendline for renewed bullish momentum. -MW
by FOREXcom
Mexican Peso Under Renewed PressureThe Mexican peso is once again under pressure against the U.S. dollar, approaching multi-year lows during certain moments of the day. This depreciation is driven by a confluence of internal and external factors, generating uncertainty in Mexican markets. The USD/MXN exchange rate has risen by 0.7%, reversing part of the initial optimism following the absence of executive orders on tariffs during Donald Trump’s first day of his new presidency. However, the subsequent mention of potential 25% tariffs on Canada and Mexico starting February 1 has added volatility to the market, putting further pressure on the peso. If implemented, this potential measure would significantly impact the Mexican economy, given its close trade relationship with the United States. The shadow of tariffs looms over the peso, generating risk aversion that weakens the currency. On the domestic front, recent economic data paints a challenging picture. Retail sales have declined by 0.1% month-over-month, marking two consecutive months of drops. Even more concerning is the 1.9% year-over-year decline in November 2024, the seventh consecutive month of contraction, exceeding market expectations of a 1.2% drop. This broad-based decline in domestic consumption, with sharp drops in key sectors such as supermarkets, department stores, healthcare products, and hardware, suggests the presence of structural issues affecting internal demand. While e-commerce and home goods show some increases, they fail to offset the weakness in other sectors. The persistent decline in retail sales reflects a underlying weakness in domestic consumption, raising questions about economic dynamism. Falling inflation opens the door for a possible rate cut by Banxico in its February meeting. This more accommodative monetary stance contrasts with expectations of a more restrictive monetary policy by the U.S. Federal Reserve, potentially narrowing the interest rate differential between the two economies and further pressuring the peso. This divergence in monetary policies adds an additional layer of uncertainty for the exchange rate. The Mexican economy's high dependence on trade and remittances from the U.S. makes it particularly vulnerable to external shocks. The imposition of new tariffs or stricter immigration policies could negatively impact public finances and further weaken domestic consumption. In this context, attention focuses on upcoming economic policy decisions in both Mexico and the United States, which will be crucial for the Mexican peso’s trajectory in the short and medium term. In the long run, the peso’s strength will largely depend on Mexico’s ability to navigate this period of uncertainty in its trade relations.
by Pepperstone
USD/MXN Buy Trade – Targeting 20.78338 Pair: USD/MXN 🇺🇸🇲🇽 Direction: Long 🔼 Target: 20.78338 🎯 Time Horizon: By Monday, Jan 20, 04:00 UTC ⏳ The pair has exhibited a downward movement, showing potential signs of a reversal. Current market behavior suggests a possible recovery toward the 20.78338 level, aligning with observed patterns in recent sessions. This trade is time-sensitive and expected to reach its conclusion by Monday at 04:00 UTC. External factors, such as market sentiment and USD-related developments, may influence the trajectory. Close observation is recommended for further confirmation of the anticipated price action. 🔍
Long
by GlobalHorns
USDMXN: The Mexican Peso Recovers After the PPIThe Mexican peso gained value against the dollar during the last session, accumulating a growth of nearly 1% . The event occurred shortly after the release of U.S. PPI data, which showed a moderate increase of 0.2%, compared to the expected 0.4%. This indicates that price levels have slowed down, potentially moderating the pace at which the Fed maintains high interest rates in the market. Uptrend: A consistent uptrend has been in place since May 2024, with no significant breaks that could invalidate the technical formation. However, recent bullish movements have failed to breach the 20.90 barrier, which has become the key level to watch for the upward pressure to continue. MACD: Lower highs in the MACD line oscillations, coupled with constant highs in price movements, have created a bearish divergence. This could indicate an imbalance in the speed at which the USD/MXN price has risen in the short term. Therefore, it’s crucial to consider the possibility of bearish corrections appearing in the near future. ADX: The ADX line has increased its oscillations in recent sessions but remains at the 20 level, indicating a lack of strength in short-term movements. This suggests that recent oscillations lack a clear directional trend and may reflect insufficient momentum in the current trend. Key Levels: 20.9033: A nearby resistance level corresponding to the November and December highs. Breaks above this level would mark a new peak and reinforce the buying strength of the uptrend. 20.0947: A critical support level that aligns with points on the upward trendline and the barrier marked by the 100-period simple moving average. Breaks below this level could strengthen new, consistent bearish pressure and pose a threat to the current uptrend. By Julian Pineda, CFA - Market Analyst
by FOREXcom
1
Mexican Peso Under Pressure Following Inflation DataThe Mexican peso is once again under pressure against the US dollar, following the release of Mexican inflation data that came in below market expectations. This depreciation, reflected in a 0.25% increase in the USD/MXN pair on Thursday, adds to a global and local context marked by uncertainty. The renewed strength of the dollar, driven by the resilience of the US economy –evidenced by data such as job openings and the non-manufacturing PMI– supports the narrative of a Federal Reserve (Fed) that is less inclined toward aggressive interest rate cuts. Adding to this is the ongoing uncertainty surrounding the policies of the incoming Trump administration, especially regarding inflationary matters, which collectively exert upward pressure on the USD. In contrast, the Mexican economy has recently shown unfavorable signs. Consumer confidence, released earlier this week, came in below expectations, reflecting growing caution among Mexican households. December inflation data, although close to the upper limit of the Bank of Mexico's (Banxico) target range of 2% to 4%, with an annual rate of 4.21%, represents a downside surprise. This data, in a context where Banxico now operates with fewer votes for its monetary policy decisions and under a governor previously inclined toward further normalization, opens the door to a more significant interest rate cut, possibly of 50 basis points, at the February meeting. Inflation in Mexico opens the door to a more aggressive rate cut, which could intensify pressure on the peso. This move, by eroding the rate differential between Mexico and the United States, at a time when less easing is expected from the Fed, could further increase upward pressure on the USD/MXN pair. Looking ahead, the upcoming inauguration of the Trump administration emerges as a crucial factor for the Mexican currency. Potential restrictive trade policies toward Mexico could generate volatility and exert greater pressure on the peso. Additionally, the release of the US non-farm payroll (NFP) data, with a forecast of 150,000 jobs added, adds another element of focus. A report indicating a tighter labor market than expected could further intensify negative pressure on the Mexican peso. The combination of a less accommodative Fed, uncertainty around Trump’s policies, and the possibility of a more aggressive rate cut by Banxico sets up a challenging scenario for the Mexican peso in the short term. We will closely monitor these factors and their impact on the Mexican currency.
by Pepperstone
USD/MXN: Testing Key Resistance Zone at 20.80Chart Analysis: The USD/MXN pair has approached the critical resistance level at 20.80, which has been a notable ceiling for price action in the past. The bullish momentum is evident, but further confirmation is required for a potential breakout. 1️⃣ Resistance Test: The 20.80 level has acted as a strong resistance historically. A breakout above this zone could pave the way for further gains toward the 21.00 psychological level. 2️⃣ Moving Averages: 50-day SMA (blue): Positioned at 20.25, providing immediate dynamic support for the short-term trend. 200-day SMA (red): At 18.74, reinforcing the broader bullish outlook with price trading significantly above it. 3️⃣ Momentum Indicators: RSI: At 60.50, edging toward overbought territory but still indicating room for further upside. MACD: Positive and rising, supporting the bullish momentum with no clear signs of divergence. What to Watch: A confirmed daily close above 20.80 could signal the continuation of the uptrend, targeting 21.00–21.20 as the next resistance zone. Conversely, failure to break above 20.80 could result in a pullback toward the 20.25–20.00 support zone, aligning with the 50-day SMA. USD/MXN remains bullish, with price action focused on a critical resistance zone. Traders should watch for confirmation of a breakout or a potential rejection. -MW
by FOREXcom
USD/MXN Breaking Down Below Key Trend LineChart Analysis: The USD/MXN pair has definitively broken below the rising trendline (black), suggesting a potential shift in the bullish structure. The price is now consolidating below the trendline near 20.14, with the next support levels coming into focus. 1️⃣ Trendline Break: The drop below the rising trendline indicates a weakening of the previous bullish momentum. Traders may now look for confirmation of a further bearish move. 2️⃣ Moving Averages: 50-day SMA (blue): At 20.19, price is hovering just below this level, reinforcing bearish pressure. 200-day SMA (red): Positioned at 18.64, this serves as the next significant support if selling intensifies. 3️⃣ Momentum Indicators: RSI: At 47.12, trending lower but not yet oversold, leaving room for additional downside. MACD: Negative and flattening, indicating continued bearish momentum with no signs of reversal yet. What to Watch: If the pair continues lower, the next key support zone lies near 19.80–20.00, followed by the 200-day SMA at 18.64. For bullish recovery, the price would need to reclaim the broken trendline and move back above the 50-day SMA at 20.19. The USD/MXN trendline break shifts the focus to downside risks, with key support zones and momentum indicators suggesting further bearish potential. -MW
by FOREXcom
USD/MXN Holding the Rising Trendline, Key Resistance in SightChart Analysis: The USD/MXN pair continues to respect the rising trendline (black), maintaining its bullish structure. Price action remains constructive as it hovers near 20.25, with a key resistance level around 20.80. 1️⃣ Rising Trendline Support: The trendline, initiated from mid-June lows, has consistently supported price dips. This upward trajectory remains intact for now. 2️⃣ Key Resistance Zone: The 20.80 level (horizontal black line) marks a critical resistance area, where price struggled to break higher earlier this month. A move above this could signal renewed bullish momentum. 3️⃣ Moving Averages: 50-day SMA (blue): Price remains above the 50-day SMA at 20.12, confirming short-term bullish strength. 200-day SMA (red): The longer-term bullish trend remains intact, with the 200-day SMA rising steadily around 18.55. 4️⃣ Momentum Indicators: RSI: Hovering near 51.41, signaling neutral momentum. Traders may watch for a push into overbought territory if price challenges resistance. MACD: The MACD remains flat, with the signal line just above zero, suggesting indecision in short-term momentum. What to Watch: A sustained break above 20.80 could signal continuation of the bullish trend and bring new highs into focus. If the rising trendline fails, traders may monitor the 50-day SMA near 20.12 as a key support level. USD/MXN remains bullish within its rising trendline structure, with the 20.80 resistance level standing as a critical hurdle. Momentum and price action suggest a key decision point ahead. -MW
by FOREXcom
Why Is the Mexican Peso So Liquid?Why Is the Mexican Peso So Liquid? The Mexican peso, a dynamic player in the global forex market, embodies a unique blend of historical resilience and modern financial attractiveness. As we delve into the reasons behind its impressive liquidity, this article offers valuable insights for traders and investors eager to understand the intricacies and opportunities presented by one of Latin America's most prominent currencies. The Mexican Peso: An Overview The Mexican peso, a currency with a rich history and a significant presence in the global market, often surprises investors asking, “How much is the Mexican peso worth?” when they discover it’s one of the strongest emerging market currencies around. Its performance in the forex market is closely tied to macroeconomic indicators, particularly those from the United States, including benchmark interest rates. The currency has benefitted from Mexico's nearshoring boom and soaring remittances, alongside a healthy fiscal position, contributing to its appeal to investors and traders worldwide. As the most traded currency in Latin America, the Mexican peso’s popularity underscores its importance in the regional and global financial landscape. With this background in mind, let’s take a look at 3 reasons the Mexican peso is so liquid. Reason 1: Strong Economic Fundamentals The liquidity of the Mexican peso today is closely tied to Mexico's strong economic fundamentals. In 2023, Mexico's economy has shown resilience and growth, marked by a significant increase in exports. This export-driven growth, reaching a record high, is supported by Mexico's robust trade relationship with the United States, making it the US's top trade partner with nearly $600 billion in two-way trade over the first nine months of 2023. Inflation control is another pillar of Mexico's economic stability. After peaking at 8.7% in 2022, inflation has been effectively managed, witnessing a decrease to around 4.26% in October 2023. This decline demonstrates the successful monetary policies of the Bank of Mexico, indicating a resilient economic environment. A key indicator of this economic improvement is in a comparison of the US dollar currency to the Mexican peso. In July 2023, the peso reached a low of 16.62 pesos per dollar vs a peak of 25.7 pesos per dollar in April 2020, showcasing its strongest performance in recent times. This strength is a direct reflection of investor confidence in the Mexican economy and can be observed in FXOpen’s free TickTrader platform. Additionally, foreign direct investment (FDI) in Mexico has reached new heights, with almost $33 billion recorded in the first nine months of 2023. The announcement of significant investments, like Tesla's planned "gigafactory" in Nuevo León, underscores the international business community's interest in Mexico, contributing to the peso's liquidity. Reason 2: Active Participation by the Central Bank The liquidity of the Mexican peso is significantly reinforced by the active role of Banco de México, the country’s central bank. The bank's monetary policy plays a crucial role in maintaining the attractiveness of the peso, which in turn contributes to its liquidity. One of the key strategies employed by Banco de México is its effective management of the overnight interbank funding rate. Throughout 2023, Banco de México maintained a consistent approach to this rate, reflecting its commitment to financial stability. For instance, the target for the overnight interbank funding rate has been kept unchanged at 11.25% for several periods in 2023, following a series of incremental increases in the preceding years. These decisions are a reflection of the bank's responsiveness to economic conditions and its aim to balance growth with price stability. Another important aspect of the bank's policy is the accumulation and management of international reserves. These reserves, which exceeded USD 203 billion as of October 2023, provide a buffer against external economic shocks, helping the country maintain economic stability in the face of global volatility. This stability is essential for sustaining the peso's liquidity, as it reassures investors about the country's economic resilience. Reason 3: High Trading Volume and Global Interest The history of the Mexican peso reveals a journey of economic reforms and policy shifts that have shaped its current state in the global market. Over the years, these changes have been contributing to stabilisation and reliability of the peso, making it a more attractive option for traders and investors and boosting its trading volume. This high trading volume creates a virtuous cycle that may further enhance the currency's liquidity. More trading volume signifies a greater number of transactions and a broader investor base, which, in turn, increases the currency's visibility and appeal in the global market. As more traders and investors engage with the peso, it may lead to rate stabilisation and smoother market movements, which are key factors for a liquid market. Additionally, the factors previously discussed, such as the strong economic fundamentals and the active role of the central bank, contribute to this cycle. A growing economy, along with effective monetary policies, boosts investor confidence. In response, more traders and investors are drawn to the currency, thereby increasing its trading volume and liquidity, and the cycle repeats. The Bottom Line In conclusion, the Mexican peso's resilience and appeal are clear indicators of its significance in the forex market. With its robust economic fundamentals, proactive central bank policies, and high trading volume attracting global interest, the peso stands as an attractive currency for traders and investors. For those looking to engage with this dynamic currency, opening an FXOpen account offers a gateway to the vibrant world of Mexican peso trading, providing an opportunity to participate in the market's ongoing growth and vitality. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
8
USDMXN To 21.00 By Year End (Read Description)USDMXN had been trading in a tight range in a series of higher lows and lower highs. This is known as an 'ascending triangle' pattern. Now, I dont actually trade triangle patterns, but my trade idea is based off exploiting this patterns flaws to facilitate a trade to the upside. If you look at the NOV 26th Bullish candle that broke the 20.70 highs, there were most likley pending market orders to buy the market on a breakout. Since then it had retraced back into the range. Now my attention turns to the 20.06 low where I suspect there are resting sell-stops of traders who are LONG. Should price trade to that level and reject, I plan to buy as counterparty to those willing sellers at 20.06. Stop-loss at 19.75 Take profit at 21.00
Long
by Randal-TraderState
2
USDMXN: Trumpconomics impact the Mexican PesoThe announcement of possible 25% across-the-board tariffs by US President-elect Donald Trump has generated trade tensions with Mexico, momentarily affecting the Mexican peso. However, after a conversation between Claudia Sheinbaum and Trump, the USDMXN showed recovery, appreciating almost 1%, reversing previous losses. Mexico's Minister of Economy, Marcelo Ebrard, highlighted that the tariffs would not only negatively affect Mexico, but also the US economy, especially the automotive sector, where an increase in production costs and prices for consumers is expected. This uncertainty could continue to affect the volatility of the Mexican peso against the U.S. dollar, depending on the outcome of these negotiations. Additionally, these measures, if implemented, are expected to increase inflation and reduce economic growth in both the U.S. and Mexico, which could further pressure the exchange rate of the Mexican peso against the U.S. dollar. Looking at the technical aspect, there is a lot of selling pressure in the 20.71 pesos per dollar zone and this has caused the stock to depreciate to 20.26. There is currently a very strong zone around 20 pesos, so it would not be normal for the peso to depreciate further despite Trump's aggressive policies. The Mexican president does not seem to want to sit idly by and her response could be equivalent, hence the value recovered timidly. Since the Asian session these developments have not been enough and hence the continuation of the peso's sell-off in favor of the dollar. RSI highlights as slightly oversold. Currently, the mid-bell zone (POC) is located around 20.426, so there could be a timid recovery to that price zone. Its current support zone is located at 20.253, so if this zone is respected, a recovery of the peso could be seen. Additionally, there has been a movement of the 50-average in the direction of the 100-average, which highlights this bearish pressure. If the crossover does not occur, it would be an incentive for long traders. In conclusion, speculation on tariffs adds volatility to the USDMXN pair, and traders should continue to monitor the development of these trade tensions and their implications for the T-MEC (Treaty between Mexico, the United States and Canada) and the bilateral economic relationship. Ion Jauregui - ActivTrades Analyst ******************************************************************************************* The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication. All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Long
by ActivTrades