The US dollar rallied yet again against the Mexican peso during the trading session on Wednesday as we continue to see greenback strength. As I had suggested yesterday, it looked as if we got a little bit of a pullback and then found support at the top of what I thought could have been a pennant. At this point, that pennant now has become a symmetrical triangle, which of course is essentially the same without the flagpole. I think at this point we are very likely to see this market continues to try to rally but I also expect to see some type of pullback from this level, as it is a 200 day EMA region.
That being said, I think this comes down to whether or not we are seeing the greenback rally overall as to what happens next. Pay attention to the US Dollar, it will give you a good idea as to whether or not the greenback is strengthening against most currencies, and as long as it does, it should continue to strengthen against the Mexican peso.
All things being equal though, we have seen a couple of very strong candles over the last couple of days, and I think we do have further to go. The most obvious target short-term would be the 19.50 level, followed by the 20 level above there. However, if we see US dollar weakness overall, then we will probably revisit the lows. I had originally thought this was going to be a very pennant, but it now looks as if that’s been killed, and we are essentially continue the longer-term grind to the upside in a bit of the channel. In other words, were probably going to go higher.
