Recommendation for USD/MXN:Buy
Buy Stop: Above 20.46
Stop Loss: Below 19.58
| Indicator | Signal |
|---|---|
| RSI | Neutral |
| MACD | Buy |
| MA(200) | Neutral |
| Fractals | Neutral |
| Parabolic SAR | Buy |
| Bollinger Bands | Neutral |
Chart Analysis
On the daily timeframe, USDMXN: D1 went up out of the triangle. Before opening a position, it must overcome the 200-day moving average line. A number of technical analysis indicators have formed signals for further growth. We do not rule out a bullish movement if USDMXN rises above its last upper fractal, upper Bollinger band and 200-day moving average line: 20.46. This level can be used as an entry point. Initial risk limitation is possible below the Parabolic signal, lower Bollinger band and long-term support line: 19.58. After opening a pending order, move the stop to the next fractal low following the Bollinger and Parabolic signals. Thus, we change the potential profit / loss ratio in our favor. The most cautious traders, after making a deal, can go to the four-hour chart and set a stop-loss, moving it in the direction of movement. If the price overcomes the stop level (19.58) without activating the order (20.46), it is recommended to delete the order: there are internal changes in the market that were not taken into account.
Fundamental Analysis
In the US, new home sales rose in July. Will the USDMXN quotes continue to rise?
U.S. New Home Sales in July increased 1% over June. A decline of 2.7% was expected. This is a positive factor for the American currency. Although, of course, the main event of the week will be the next Fed symposium in Jackson Hole, which will be held on August 26-28. The American regulator can either keep its monetary policy or tighten it a little. Most likely, the dynamics of the USDMXN currency pair will depend on news from the USA. Recall that the Bank of Mexico on August 12 raised the rate to 4.5% from 4.25%. So far, this has pushed Mexico First Half-Month Core CPI down slightly in August to 0.28% MoM from 0.31% in July. The final inflation data for August is due out on September 9th. In July, it amounted to 5.81% in annual terms. The peso did not react to the rate hike, as some investors decided that it might not be sufficient. In Mexico on August 25, will be published the final data on GDP for the 2nd quarter. According to forecasts, GDP will remain unchanged from the preliminary estimate of + 1.5% in quarterly terms. Earlier, the negative factor for the Mexican peso was the decline in retail sales in June by 0.6%.