Earnings season is a crucial time for investors and analysts, as it provides insights into how well companies have performed over the past quarter and gives indications of their future earnings. In 2023, expectations for US Q1 earnings were low due to economic challenges and rising interest rates. Surprisingly, many companies beat these low expectations, with 75% of S&P 500 companies surpassing forecasts.
USD/MXN: another wave down
2021-01-25 • Updated
Have a look at this layout: USD/MXN crossed all the MAs to reach 20.00. Looks spectacular to suggest a tactical trend change, doesn't it? Well, most probably it's not. As we pointed out in the previous article on exotics (https://bit.ly/2Yaufc5), these currencies are notably volatile and weak against the USD, that's why fluctuations such as the one you see here are pretty normal. Besides, it was recently announced that Mexican President Lopez Obrador got infected with the virus - that's a plausible reason for a national currency to temporarily get emotional and lose some value. Strategically, if you look at the daily and weekly charts, you'll see that there is still a lot of room to the downside before USD/MXN should be expected to take on its normal upward trajectory.
Therefore, tactically, the expectation is that USD/MXN goes down to 19.55 crossing all the MAs downwards.
For the first downward wave (1), 19.65-19.70 seems to be an appropriate Take Profit level to set if you open a Sell position while USD/MXN is around 19.90.
Down there, at 19.70, once and if you see a local bullish reversal after a drop, re-group and prepare for another wave downwards (2) to break the support of 19.55.
The MAs are very convenient orientation and reversal references.
When I started trading stocks a few years ago, I often needed to pay more attention to my technical analysis skills and trust that the market would play fair according to my analysis. I have since discovered that the safer approach to trading stocks is to, more often than not, seek out investing opportunities - that is, catching stock commodities with a potential to rise.
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