The US dollar rallied against the Mexican peso early during the trading session on Thursday but has seen sellers come back into the market to push it back down.
What I find interesting is that we broke above the 50-day EMA but found enough resistance above to turn things around and form a pretty ugly looking candlestick.
The shooting star that it looks like we are trying to form is a very negative sign.
And it's worth noting that not only were we above the 50-day EMA, but we were also just below the crucial 17.5 level. That's an area that has been resistance previously, and I think ultimately will remain so.
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If we fall from here, the 17.15 level is an area that I think a lot of people would be watching. That is, I think, just a continuation of the overall sideways action that we had been in.
It's very difficult to buy the US dollar against the Mexican peso, so I do prefer to sell this pair because of the massive interest rate differential.
It's not that you can't get long of this market, it's just that you have to make sure that it moves quick enough to work against the interest rate payments that you will be making daily.
Ultimately, I do think this pair breaks down a little bit from here. I think this is a shorter-term chart type of setup. I do like shorting it. I don't necessarily think that we're going to break down below the bottom, though, so keep in mind this is short-lived.
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