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Liquidity, Technical Outlook

MXN

Trading desks have noted that USDMXN liquidity density was one of the worst impacted by the holidays, in some cases 50% below the 30day average. This may have impacted the volatility seen this morning and helps explain the sharp reversal combined with the renewed USD selling.


With USDMXN giving back most of its gains, our technical analyst looks at the longer-term chart:


Tech Focus: USDMXN has traded in a volatile manner today.

  • The pair rallied to a high print of 20.6641 earlier before finding resistance.
  • A key support has been defined at 19.7006, 8 Dec low where break would confirm a resumption of the underlying downtrend.
  • On the upside, clearance of 20.6641 would instead highlight a more convincing base and a potential reversal.
  • Until then, the trend remains bearish.

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