Mexican Peso, US Dollar, USD/MXN Price Forecast:
- USD/MXN[1] is breaking down to a fresh monthly low to start this week.
- With an extremely weak US Dollar[2] in focus on Wednesday for the FOMC[3] rate decision, the big question is one of continuation potential in the pair.
- A major inflection point for USD[4]/MXN sits just below current price action[5], around the 21.50 spot on the chart, currently constituting the four-month-low in the pair.
- As discussed as part of the Core Perimeter Trading Model, Mexican Peso trends are often at the mercy of US economic trends[6].
USD/MXN Sets Fresh Monthly Low
As the US Dollar[7] breaks down to a fresh two-month-low, USD/MXN has been unable to avoid the carnage as the Dollar-Peso pair continues to sell-off. The bearish move appears a bit more mild, however, because while the US Dollar is hitting a fresh two-year-low, USD/MXN will have to settle for a fresh monthly low, at least for now. The four-month-low, the same level that stymied sellers in June sits just below around 21.50, so that may soon be in-play; but for USD/MXN to match the US Dollar’s two-year-lows, the pair is going to need to continue moving south on the chart until the 17.50 level can come into play, and that may take a while.
Notably, and to put this recent dynamic to some reference – today sees price action cross below the 50% marker of the bullish 2020 move in USD/MXN for the first time in over a month. Meanwhile, both EUR/USD[8] and AUD/USD[9] are trading higher than they were at the 2020 open after watching the entirety of
