USD/MXN: December 2015 Forecast - 29 November 2015

The USD/MXN pair continued to go sideways during the course of November, using the 16.40 level as support. During the last week of November, we ended up forming a hammer and that of course has caught my attention. We are definitely in an uptrend, and as a result it looks like we should continue to go higher. After all, the US dollar is one of the most favored currencies in the world at the moment.

On the other side of the equation, the Mexican peso represents crude oil. Crude oil is in a lot of trouble and I believe will continue to lose value. Ultimately, the market should continue to drop, pushing the value of the US dollar higher against the Mexican peso as Mexico is responsible for exporting quite a bit of oil from the Gulf of Mexico.

Latin America

You also have to keep in mind that the Mexican peso is considered to be a proxy for most of Latin America, and with that it would not be surprising at all to see this pair continue to go higher as people will shun taking risk in Third World areas. After all, the lesson you want to do when the global markets asserting the slowdown is trying to invest in frontier economies, so it makes sense that we continue to rise. I believe the pullbacks will continue to offer buying opportunities as the market should reach back towards the 17.00 level sometime during the month, and possibly even higher than that as we have recently been as high as 17.30 just a couple of months ago.

Even if we break down below the 16.40 level, I believe that there is a fairly supportive uptrend line just below there that should come into play as well. In other words, I have no interest in selling this pair as I believe sooner or later we will get a nice buying opportunity on what will be value in the US dollar.

USDMXN Monthly

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.