Blake Morrow’s EDGE Chart of The Day – The USDMXN 18.5000 level is more important than you think!
The USDMXN 18.5000 level has capped the rally in recent weeks. And you can see the strong descending trend line capping the market. Even the rally this week has tried to keep a “lower high” but we think this is just a byproduct of the descending trend line. A break of the 18.5000 level would target 18.8700, but 20.2100 would be more likely. While above the 200dma we expect a break of resistance.
You should keep a close eye on the RSI (lower panel) on a breakout. If price moves higher, the RSI could be a good gauge to see if the trend will continue with a confirming move higher, or potential divergence which could signal we hit a near term top between 18.8700 to 20.2100.