Technical Analysis – USDMXN close to 1½-year high; possibly overbought
June 14, 2018 3:26 pm
USDMXN has appreciated considerably after reaching an eight-and-a-half-month low of 17.9347 on April 17. On Wednesday, it touched a near one-and-a-half-year high of 20.8235, while it is currently trading not far below that peak.
Adding to the clearly bullish short-term picture are the positively-aligned Tenkan- and Kijun-sen lines. The Chikou Span, however, may be pointing to an overbought market; a reversal in the near-term should not be ruled out.
Further advances may meet resistance around yesterday’s high of 20.8235, while the 21 round figure lies not far above and could also act as a barrier to more bullish movement.
In case of declines, support could come around the current levels of the Tenkan-sen and the Kijun-sen, at 20.3399 and 19.9852 respectively. Notice that the region around the latter also encapsulates the 20 handle that may be of psychological significance.
The medium-term picture is clearly positive, with trading taking place above the 50- and 100-day moving average lines, as well as above the Ichimoku cloud. All these are supporting the positive medium-term signal given by the bullish (golden) cross that was recorded around late May when the 50-day MA moved above the 100-day one.
Overall, both the short- and medium-term outlooks are bullish at the moment, though some caution is advised in the near-term due to a possibly overbought market.
USDMXN has appreciated considerably after reaching an eight-and-a-half-month low of 17.9347 on April 17. On Wednesday, it touched a near one-and-a-half-year high of 20.8235, while it is currently trading not far below that peak.
Adding to the clearly bullish short-term picture are the positively-aligned Tenkan- and Kijun-sen lines. The Chikou Span, however, may be pointing to an overbought market; a reversal in the near-term should not be ruled out.
Further advances may meet resistance around yesterday’s high of 20.8235, while the 21 round figure lies not far above and could also act as a barrier to more bullish movement.
In case of declines, support could come around the current levels of the Tenkan-sen and the Kijun-sen, at 20.3399 and 19.9852 respectively. Notice that the region around the latter also encapsulates the 20 handle that may be of psychological significance.
The medium-term picture is clearly positive, with trading taking place above the 50- and 100-day moving average lines, as well as above the Ichimoku cloud. All these are supporting the positive medium-term signal given by the bullish (golden) cross that was recorded around late May when the 50-day MA moved above the 100-day one.
Overall, both the short- and medium-term outlooks are bullish at the moment, though some caution is advised in the near-term due to a possibly overbought market.
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