12 Feb 2016
MXN: On a weak footing – SocGen
Research Team at Societe Generale, suggests that after breaking above a massive triangle back in 2014, USD/MXN has been undergoing a relentless uptrend.
Key Quotes
“It is worth noting that the retracements within this move have been shallow and short lived and contained by the fast monthly Moving Average (currently at 17.30) so far.
The pair is now piercing above the upper limit of a massive upward channel (18.80 levels) which underlines a fresh regain of bullish momentum and therefore it should continue the uptrend. Medium term, the pair looks to head towards 19.85, the initial projection for the up move and also for the triangle break with next target located at 20.50/70. Monthly RSI is at a pivotal ceiling however signs of distribution still lack and a retracement may take shape only after achieving the aforementioned potential.
If we drop down to daily chart, the pair is breaching above a multi-month upward channel (also at 18.80/18.60) and is likely to test a steeper one at 19.35/19.45. 18.80/18.60 will now be an immediate support and only a break below will mean early signs of retracement. Previous highs of 17.50/17.30 will remain a key support.”
Key Quotes
“It is worth noting that the retracements within this move have been shallow and short lived and contained by the fast monthly Moving Average (currently at 17.30) so far.
The pair is now piercing above the upper limit of a massive upward channel (18.80 levels) which underlines a fresh regain of bullish momentum and therefore it should continue the uptrend. Medium term, the pair looks to head towards 19.85, the initial projection for the up move and also for the triangle break with next target located at 20.50/70. Monthly RSI is at a pivotal ceiling however signs of distribution still lack and a retracement may take shape only after achieving the aforementioned potential.
If we drop down to daily chart, the pair is breaching above a multi-month upward channel (also at 18.80/18.60) and is likely to test a steeper one at 19.35/19.45. 18.80/18.60 will now be an immediate support and only a break below will mean early signs of retracement. Previous highs of 17.50/17.30 will remain a key support.”