Updated USD/MXN long outlook: US Oil, futures, RSI and more.
Hello traders!
I hope you are doing okay in these stressful times.
I have been monitoring my USD/MXN long (now in drawdown) and checking again that I have my facts right:
is it a good idea? The timing of it maybe stinks (got in too early?) but the general idea seems sound.
Today I look at:
- US Oil and MXN correlation in the last ten years, and where in the correlation window we are positioned at present;
- ATR performance of USD/MXN versus price movement;
- RSI over several time-frames, showing a distinct bottoming out that is negating the downtrend in USD/MXN;
- MXN/USD (CME) futures (expiry: December 2020) contracts show an hourly buy volume divergence from the price rally since 19th November;
- confluence of technical levels (Fib. 0.76 retracement of the 'pandemic swing' earlier this year; long-term resistance from 2018 and 2019, turned support;
long-term rising trendline on the monthly chart).
All of these seem to suggest that we could be at a turning point; the answer is whether the sellers will fold their positions and thus generate a reversal by
a lack of selling positions, or whether buyers will force that reversal; also, fundamentals may kick in, but as the analyst quoted in the Reuters article (that
I show in my video) says, it is no longer about fundamentals but about a carry trade that attracts the Mxn. Peso buying.
Take care and see you in my next.
As John Kicklighter (Daily FX) likes to say at the end of his videos: "Good luck trading out there".
Francesco
I hope you are doing okay in these stressful times.
I have been monitoring my USD/MXN long (now in drawdown) and checking again that I have my facts right:
is it a good idea? The timing of it maybe stinks (got in too early?) but the general idea seems sound.
Today I look at:
- US Oil and MXN correlation in the last ten years, and where in the correlation window we are positioned at present;
- ATR performance of USD/MXN versus price movement;
- RSI over several time-frames, showing a distinct bottoming out that is negating the downtrend in USD/MXN;
- MXN/USD (CME) futures (expiry: December 2020) contracts show an hourly buy volume divergence from the price rally since 19th November;
- confluence of technical levels (Fib. 0.76 retracement of the 'pandemic swing' earlier this year; long-term resistance from 2018 and 2019, turned support;
long-term rising trendline on the monthly chart).
All of these seem to suggest that we could be at a turning point; the answer is whether the sellers will fold their positions and thus generate a reversal by
a lack of selling positions, or whether buyers will force that reversal; also, fundamentals may kick in, but as the analyst quoted in the Reuters article (that
I show in my video) says, it is no longer about fundamentals but about a carry trade that attracts the Mxn. Peso buying.
Take care and see you in my next.
As John Kicklighter (Daily FX) likes to say at the end of his videos: "Good luck trading out there".
Francesco
