Over the last three trading sessions, the pair has risen by more than 2% in favor of the U.S. dollar as the threat of tariffs has become a reality. So far, President Trump has confirmed that the measures will take effect today, and there is currently no hope for another deadline extension.
The President of Mexico has traveled to the United States for an official meeting, but at this time, there are no expectations that the measure will be lifted in the short term. Given this, investors have determined that the U.S. dollar is likely the strongest currency to consider, especially if there is a potential economic slowdown in Mexico’s activity in the coming months.
Consistent Sideways Range
For now, USD/MXN remains in a sideways range, defined by a ceiling at 20.91 pesos per dollar and a floor at 20.07 pesos per dollar. The recent bullish momentum has once again tested resistance, and if upward pressure on the U.S. dollar remains strong, it is possible that the sideways channel could give way to an uptrend, which has remained dormant. It is important to note that the latest candlestick in the formation shows strong neutrality, highlighting the barrier imposed by the current resistance level.
ADX Indicator
At the moment, the ADX line has started an upward trend and is now above the neutral level of 20 on the indicator. This suggests that the average of bullish movements in recent trading sessions is becoming trend-defining. However, it is crucial that the ADX line continues to move away from the neutral level to confirm that buying pressure is strengthening in the short term.
Key Levels:
By Julian Pineda, CFA – Market Analyst
The President of Mexico has traveled to the United States for an official meeting, but at this time, there are no expectations that the measure will be lifted in the short term. Given this, investors have determined that the U.S. dollar is likely the strongest currency to consider, especially if there is a potential economic slowdown in Mexico’s activity in the coming months.
Consistent Sideways Range
For now, USD/MXN remains in a sideways range, defined by a ceiling at 20.91 pesos per dollar and a floor at 20.07 pesos per dollar. The recent bullish momentum has once again tested resistance, and if upward pressure on the U.S. dollar remains strong, it is possible that the sideways channel could give way to an uptrend, which has remained dormant. It is important to note that the latest candlestick in the formation shows strong neutrality, highlighting the barrier imposed by the current resistance level.
ADX Indicator
At the moment, the ADX line has started an upward trend and is now above the neutral level of 20 on the indicator. This suggests that the average of bullish movements in recent trading sessions is becoming trend-defining. However, it is crucial that the ADX line continues to move away from the neutral level to confirm that buying pressure is strengthening in the short term.
Key Levels:
- 20.91: Major resistance, marking the upper boundary of the broad sideways range and acting as the most critical barrier for the latest bullish move. Breaks above this level could lead to new highs, ending the current consolidation phase.
- 20.43: Important support, aligning with the Ichimoku cloud barrier as well as the 50 and 100-period moving averages, highlighting the strength of this level. If the price falls below this point, the sideways range could extend further in the coming sessions.
- 20.07: Final support, positioned at the lowest price levels recorded in December 2024. If the price nears this zone, it could reinforce the bearish outlook, completely invalidating the long-term bullish trend.
By Julian Pineda, CFA – Market Analyst
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.