Navarro comments give the MXN bulls a push
Peter Navarro, director of the White House Trade council, commented that the US, Mexico and Canada could form a trade "powerhouse". HMMM. That is encouraging news for trade relations with Mexico (wall or no wall).
The price of the USDMXN which has been toying with the 200 day MA (currently at 19.587) was broken with momentum and the pair is moving toward the post election double bottom at the 19.42 area.
Looking at the daily chart, the price has also moved below the 50% of the move up from the April 29th 2016 low. That level comes in at 19.5402. That is a risk level for the shorts. Stay below bearish.
Taking a longer view of the USDMXN, there have been 34 months since the last major bottom on June 2014. Of those 34 months, there have been 9 down months (inclusive of this month which is really not over of course). We are in the midst of the 2nd consecutive month decline. That only happened one other time (March and April of 2016). That April low is the low outlined in the analysis above.
Looking at the chart, the swing highs in Feb 2016 (at 19.44) and June 2016 (at 19.50) are in play. Yes, we traded below those level when the price made the lows earlier this month and each time bounced quickly. So be aware. It is a key support area. However, if broken, that should open the door for more momentum selling.
