The USD/MXN is probably one of the most highly volatile currency pairs. Trends change every month and the price of the USD has changed over the past 3 months from 18.38 to 19.9 MXN. At the moment there are all signs for the formation of another trend in favor of the dollar. At the same time, the USD is under pressure due to the political component and problems with the financing of the Federal government, which was forced to suspend its work again. However, strong economic statistics and the growth of the US economy allow the dollar to hold its position, and to even strengthen against many currencies.
This week the dollar's growth was caused by a decline on the stock market, which was caused by a report on the high level of wages in the United States and forecasts of further rate increases by the Federal Reserve. The latest employment market report showed a record decrease in the number of applications for unemployment benefits over the past 45 years, which gives reason to expect further growth in wages in the United States. In addition, bond yields in the United States also saw increases.
The growth of the Mexican economy, in contrast, slows down. The latest data showed a 4.5% decline in gross fixed investment in January, while investors expected the volume of investment to decline by only 3%. The consumer confidence index fell to the lowest level for the last six months and amounted to 85.9 points. It should also be noted that decreases in oil prices have had a negative impact on the value of the peso.
The MACD and Stochastic oscillators signal the efficiency of the short trades, but in this situation the most optimal course of action would be the deals on the newly-formed trend - deals to Buy, because the dollar is still quite strong and able to cope with the negative factors that affect its value.
