USD/MXN Price Analysis: Mexican Peso rebound needs validation from 16.87 and US NFP
- USD/MXN pares the biggest daily gain in a month but lacks downside momentum of late.
- Clear upside break of triangle, sustained trading beyond the key SMA confluence favors Mexican Peso sellers.
- Overbought RSI prods USD/MXN buyers ahead of US NFP.
USD/MXN takes offers to refreshe intraday bottom surrounding 16.98, after reversing from the weekly top, as markets brace for the key US employment report for August on Friday.
USD/MXN rallied the most in a month while refreshing the weekly top on Thursday after it crossed the top line of a five-week-old symmetrical triangle. The bullish breakout also gained support from the MACD signals to renew the multi-day top. However, the nearly overbought RSI and the pre-data positioning seem to weigh on the Mexican Peso (MXN) pair of late.
Even so, a convergence of the 100-SMA and 200-SMA, around 16.94–93, appears a tough nut to crack for the USD/MXN sellers.
Following that, the stated triangle’s top line surrounding 16.87 will be in the spotlight.
Should the USD/MXN bears keep the reins past 16.87, the odds of witnessing a fall toward the rising support line stretched from late July, near 16.70, can’t be ruled out.
On the contrary, the USD/MXN pair’s recovery needs to refresh the weekly top, currently around 17.11, to convince the buyers.
Even so, the mid-August swing high of 17.20 and the previous monthly peak surrounding 17.42 could test the Mexican Peso (MXN) sellers before giving them control.
USD/MXN: Four-hour chart
Trend: Recovery expected