USD/MXN 1H Chart: Channel Down

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USD/MXN 1H Chart: Channel Down

• The American Dollar was trading against the Mexican Peso in a medium-term ascending channel.
  
  
• However, after a data release on the US CPI the buck entered into a seven hour downfall and lost 1.3% in value.
  
• Such depreciation led to appearance of the current short-term descending channel with two reaction highs and once reaction low.
  
• Since the pattern has not formed completely, the currency pair is expected to continue to move within it at least until the weekly S1 at 17.7187.
  
• Afterwards, a rebound might happen.
  
  
• On the other hand, by that time the rate might experience additional pressure from the approached 55-hour SMA, which could impede the climb upstairs.
  
• Finally, there is a need to take into account that due to narrowness of the channel it might be prematurely distorted by any news coming from North America.