Last week’s strong demand for USDMXN confirmed the underlying tone that has marked this currency pair since April – taking prices to the top of an increasingly positive Keltner channel for the first time since June.
April’s bullish move out of an 8 week consolidation range led to gains of almost 9%. The move clearly above the 21 week moving average was confirmed by a similar positive trigger in our RSI indicator.
That was followed by profit taking/consolidation that took USDMXN back to the 21 week moving average without clearly breaking below (necessary to give confirmation to more negative signals in RSI.
But the bulls are back in charge in USDMXN and although this week’s price action is not building upon the gains to any significant degree, nor are we seeing a reaction.
So we remain bullish, looking for any setbacks to be contained near last week’s Marabuzo line, and with scope to projected Fibonacci levels of 20.1500 and 20.3750.