Mexican Peso increases gains against USD after release of lower US PPI inflation data
Technical Analysis: USD/MXN unfolds correction within downmove
USD/MXN recovers after a protracted fall within a rising channel, as shown on the chart below.
The rebound on Monday looks corrective in nature and, although it will probably stretch a final, third, “c” leg higher to complete an ABC correction, the decline from the top of the channel looks unfinished and is likely to resume again until it reaches the lower channel line at around 18.30. A break back below 18.97 (lows of wave “b”) would provide added confirmation of such a resumption, as would a break below 18.77 (August 9 low).
Such a break lower would probably target 18.35 and the 200-period Simple Moving Average (SMA). The lower channel line will likely provide solid support at roughly 18.30, too.
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