USD/MXN Price Analysis: Bulls looking to engage ahead of Banxico

• USD/MXN bulls seeking upside extension.
• Traders should be wary of the Banxico meeting.

USD/MXN is ripe for a continuation to the upside as traders will seek to buy the dip, but Banxico is a present danger as it will announce its latest rate decision on Thursday, March 25th.

The Bank is expected to leave rates on hold at 4.00% also there are chances of a 0.25% rate cut.

The following illustrates where the bulls may seek to engage from:

30-min chart

As can be seen, the price is melting in drift to the downside to test the various supporting levels measured by the Fibonacci retracement of the bullish impulse. 

The first location from which bulls would like to see the price supported would be from prior resistance and a 38.2% Fibo. 

From this point, should the price stablise, traders can mark out their targets and stop losses for prospects of bullish structure from which to enter from. 

Failures at the 38.2% opens the 50% mean reversion level and then a 61.8% Fibo. 

Beyond the 61.8%, there would be too much-selling pressure and the set-up would be invalidated below prior resistance structures all along the level.