The USD/MXN has fallen through its lower limit, indicating a potential continuation of its decline, according to FX analysts from Société Générale. The USD could decrease to levels at 19.57 and 19.35, with immediate support noted at 19.75/19.68, which corresponds to the 200-day moving average.
The daily MACD is in a deeply negative position, suggesting a sustained downward movement. A bounce back to the recent pivot high at 20.40 is possible, but failure to maintain the moving average at 19.68 may lead to further declines towards 19.57 and 19.35.
Price Momentum And Key Levels
If we examine how this has played out, the drop beneath the established boundary is a clear indication of continued downward momentum. Analysts at Société Générale point towards upcoming price levels of 19.57 and 19.35 as likely targets. Before those points are reached, however, immediate support exists around 19.75/19.68, a zone which aligns with the 200-day moving average.
The negative positioning of the daily MACD strengthens the case for a prolonged downward trajectory. It’s worth noting, however, that a bounce is not out of the question, with a potential recovery towards 20.40. If the price fails to hold at the moving average of 19.68, lower levels become far more probable.
For those engaged in derivatives trading, this isn’t something to overlook. Short positions remain in favour while the price continues below resistance. However, any failure to maintain the downward momentum may lead to a recalibration. Traders should be mindful that increased volatility could present opportunities for both short-term pullbacks and deeper moves towards the lower targets identified by Société Générale.
External Market Influences
At the moment, maintaining flexibility is key. Reaction at the 200-day moving average will be pivotal in shaping the next movement. If traders see price action stabilising around this region, a reversal could gain some traction. Otherwise, further declines should remain the base case.
It’s also important to be conscious of external factors that may influence price swings. Broader moves in the dollar, global risk sentiment, and any developments in Mexican economic data could all affect positioning. Any sudden shifts in these areas might lead to fluctuations beyond the technical expectations.
