USD/CHF And USD/MXN Analysis: January 12, 2018
FxPro Financial Services Ltd | Jan 12, 2018 09:44AM ET
The USD/CHF pair has moved lower to test important support today at 0.96990. This is a crucial level because a loss here creates a lower low and a potential test on the supporting trend lines down to 0.96700. Below this level price can break down to 0.96193 and 0.69000 beyond. Support below can then be found at 0.95501 and 0.94989. The low from September is located at 0.94201.
The benefit of the doubt can be given to the supporting trend lines with the view that the whole structure that the price has carved out is, in fact, a bull flag. This would mean that price could bounce from the trend lines around 0.96800 and move higher to test the resistance at 0.98350 before a retest of the channel top at 0.99265 and the subsequent overhead trend line at 0.99978. A break above here would essentially be a test of parity at 1.00000 and then 1.00373.
USD/MXN
The current NAFTA negotiations have reached a difficult impasse. The US is overtly anti-NAFTA, while Canada and Mexico are cutting their losses and looking to China for new investment and trade deals. Mexico and the EU are looking to update their current 17-year old agreement. The next round of NAFTA negotiations takes place between the 23rd and the 28th of January. This pair has been trending higher from a low of 17.43200 in July 2017. The rally had reached a high of 19.9000 before pulling back to current levels of 19.12710 and trend line support. Resistance comes in the form of the descending trend line at 19.36330, which is the previous high from the 15th of November. A break above here would signal an attempt to retest the high and the 20.0000 level.
Support can be found at today’s low of 19.12710, with the 50-Day MA approaching the level to strengthen it from below. Further support is located at 18.90286 and the 100 DMA at 18.85000. The 200 DMA at 18.75095 is close above support at 18.66935. The major recent low from November at 18.43700 must be held to avoid a bigger selloff.
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