- USDMXN rises to highest level since August
- This pair has been on of the biggest fallers YTD
- Bullish technical signal could lead to sustained recovery
The USDMXN is enjoying a second consecutive day of gains and there are growing signs that this market could be set for a recovery. At the start of the year this cross had a mountain of fundamental factors supporting further increases with Trump set to assume his role in the White House seemingly intent on punishing his southern neighbor.
A combination of unrealistically elevated expectations heading into 2017 as well as a series of setbacks for the new administration have weighed on price but the recent rise has given hope to the longs that the worst may be over. Furthermore, the latest positioning in the US dollar remains heavily short and given the boost received from the Fed last week the USDMXN pair could be one of the most attractive to gain long US dollar exposure.
The USDMXN may have formed a base after a strong decline seen throughout 2017. Source: xStation
The technical picture for this market has improved in recent days and with price now retesting the 18 handle there could be further gains ahead. 18.10 may offer some resistance but if price gets above there in the coming sessions then the near 2-month long bottoming period may have come to an end.
Price has broken above an ichimoku cloud for the first time since January. Source: xStation
The market has today broken above an Ichimoku cloud on D1- the first time since January that price has been above this trend indicator. A break below the cloud back in February provided a good short signal and should there be further confirmation of this break higher with the accompanying lines also moving above the cloud in the coming sessions then the outlook will become far more favourable for longs.