The most profitable trades are the ones you make right before the price moves. But how can you know when a breakout is coming? Keeping an eye on the charts and trading news is a good start if you want to get ahead of the crowd, but you’re specifically looking for news and other influences that are strong enough to provoke a breakout.
The fundamental releases and updates of many popular currency pairs are very hard to trade on at the moment. In fact, most of Europe’s currency pairs are suffering from more volatile shifts than usual, forcing traders to look elsewhere for profitable options. FX News looked at some of the current price trends of recent and found MXN’s rise both interesting and extraordinary. So why isn’t it all over the trading news?
At the end of March, USDMXN was flying and many analysts pointed to the rumors of the Fed cooking the numbers to inflate USD. Then, unexpectedly, USDMXN fell from a high of 19.44768 to a 2019 low of 18.74959. The fall happened over a two-week period then dropped into a sideways movement. This is not the first time MXN has outperformed USD in this manner. In fact, it has occurred three times this year already, with very similar highs, lows, and transitions. Could MXN be stuck on repeat?
If you are a forex analyst using multiple technical indicators, your conclusions would probably lead to a clear ‘Sell’ order. But are there times when the indicators get it wrong?
Over the last few days, the trading news outlets have been reporting a USDMXN downtrend, which appears to have hit rock bottom and is holding at a range of 18.74800-18.75000. MXN’s temporary price stability has already lasted much longer than the brief reversal spikes that commonly appear on a longer timeframe. The last time USD pushed MXN back, it made a total recovery in just over a week. The same can be said for the previous two price reversals, and it’s not limited to just USDMXN.
Have a look at 8 of the popular MXN pairs and take note of the clear trend.
As you can see, MXN outperformed the big name currencies in all examples. So what caused the peso’s recent prosperity? Fundamental analysis shows a contrast of positive and negative news releases, none of which could support such a rally across the board. Could it be that the world has overvalued the peso and a rapid rebound is coming?
If USD falls further because of continuing MXN strength, it could mean that the downtrend still has momentum, the technical indicators were right, and the pattern of the last three months is over. If the cycle follows true and repeats, then we should see a rise in USDMXN this week—making ‘Buy’ the profitable order. Just remember, there’s no guarantee that history will repeat, so make time to follow the forex market closely and set a tight ‘Stop Loss’ for your orders.
If you don’t have a funded trading account at the ready, don’t worry. The Exness registration is straightforward and you could be trading on the real market sooner than you might think.
Be ready for MXN’s next major move
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