- The US dollar has fallen against the Mexican peso, although it’s curbed some of its losses as we had a lot of chaos during the Wednesday session, despite the fact that it may not look like it here.
- There were reports coming out of the New York Times suggesting that Donald Trump was in fact going to fire Jerome Powell and had a draft letter as well as had talked to several Republican lawmakers to see if that was something they would support.
- We had a press conference later in the day with the PM of Bahrain and he basically shot most of that idea down. He expressed his displeasure with Jerome Powell, but really the Federal Reserve chairman doesn’t look like he’s going to lose his job, and everything went back to normal.
Been a Long Grind Lower
Speaking of normal, this is a pair that’s been grinding lower for a while, and the US dollar gaining a little bit of strength probably has more to do with the bond market than anything else as rates in the bond market had risen during the day. Whether or not we have a significant bounce from here remains to be seen, but I’d be very interested in seeing how this market behaves near the 19 Mexican peso level because we have the 50 day EMA hanging around that same area.
And of course, there is a lot of interest due to psychological signs of exhaustion in that area might be nice selling opportunities. So, you can take advantage of the interest rate difference, breaking above the 50 day EMA opens up the possibility of a move to 19.30. But I don’t necessarily look for that to happen quite yet.
The 18.5 level underneath is a significant support level in the short term, but longer term, I think if you break down below there, then the 18 level is where I’m looking for this pair to go.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.