USD/MXN is traded at 20.901 level at the time of writing. The pressure remains high as the pair is still located in the seller’s territory. The DXY’s sell-off forces the USD to depreciate versus its rivals. Still, the pair is located around a strong demand zone, that's why we can search for long opportunities.
In the short term, the volatility is high after the US inflation data publication. The CPI registered a 0.8% growth in November versus 0.7% expected, while the Core CPI increased by 0.5% as expected. Furthermore, the Prelim UoM Consumer Sentiment jumped from 67.4 points to 70.4 points above 67.9 expected.
USD/MXN Technical Analysis!
USD/MXN challenges the 61.8% retracement level after registering only false breakouts through the 21.000 psychological level. The bearish pressure remains high as long as it stays under the downtrend line.
Registering only a false breakdown below the 61.8% retracement level and coming back and stabilizing within the ascending pitchfork’s body, above the lower median line (lml) could announce potential leg higher. Actually, a valid breakout through the downtrend line may signal that the corrective phase is over.
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