The USD/MXN has gone below 17 for the first time since May 2024, according to Christian Lawrence and Molly Schwartz of Rabobank. This has prompted a projection revision toward 16.5 in the upcoming weeks. A minor retracement is anticipated for next year, with the pair remaining within recent ranges and failing to break below 16.25. They predict robust carry demand and muted volatility keeping MXN maintained.
Technical break strengthens MXN
"The recent breakdown through 17 offers up a move to 16.5 in the near future, and we anticipate robust demand for carry to remain supportive MXN. Although it is comfortably within recent ranges, we do have a slight regression planned for next year."
We have been closely watching the USD/MXN market movement as it confirmed a close below the 17 handle (a close below followed by a lower close), which opened up thin air down to mild support around 16.45/49 before strong support at 16.25. Our unique reversal indicator's warning flags were activated by that decline, and bullish divergence did appear.
"Given this, we are aiming for USD/MXN to reach 16.5 in the upcoming weeks. We do not anticipate the pair breaking below 16.25, although we cannot rule out an extension below that."
"On the other hand, if volatility surges, we will quickly return to price congestion in the mid-17s, with a move back over 18 more than feasible in short order."
"We believe that the outlook for Forex volatility has structurally moved within the current regime and that MXN's reaction function to volatility has also been decreased, and we have updated our projection for USD/MXN downward to reflect the verified close below crucial support at the 17 handle."
Technical break strengthens MXN
"The recent breakdown through 17 offers up a move to 16.5 in the near future, and we anticipate robust demand for carry to remain supportive MXN. Although it is comfortably within recent ranges, we do have a slight regression planned for next year."
We have been closely watching the USD/MXN market movement as it confirmed a close below the 17 handle (a close below followed by a lower close), which opened up thin air down to mild support around 16.45/49 before strong support at 16.25. Our unique reversal indicator's warning flags were activated by that decline, and bullish divergence did appear.
"Given this, we are aiming for USD/MXN to reach 16.5 in the upcoming weeks. We do not anticipate the pair breaking below 16.25, although we cannot rule out an extension below that."
"On the other hand, if volatility surges, we will quickly return to price congestion in the mid-17s, with a move back over 18 more than feasible in short order."
"We believe that the outlook for Forex volatility has structurally moved within the current regime and that MXN's reaction function to volatility has also been decreased, and we have updated our projection for USD/MXN downward to reflect the verified close below crucial support at the 17 handle."
