This pair is about to hit major support where it's likely not only to hold but turn and then go on a tear to the upside. The indication is for a +20% run here, from the buy zone, making it well worth the wait - and then a major Buy.
Comment
⋅
I'm going to show you a simple trick; This (Shark) pattern also presupposes the "rate of the bounce" - usually, extremaly reliably! -, in this case clearly pointing to an end of August pattern completion. Which means, once in the "Buy Zone", feel free to load up on those end-of-August 21 Calls (FX), on any daily reversal. (Which, going by similar, previous pattern reversals/completions, has an 11,000%-13,000% net profit potential!!)
I am going to make one further prediction; This is how it's going to get up there (to 21). Just follow the arrows.)
Comment
⋅
Mexico should be the main beneficiary of China's upcoming "Japanification" (multi-decade long recession). Mexico's Debt/GDP has also contracted for 15 consecutive years by -10.6% relative to nominal GDP. The Peso is now in position to be one of the best long-term bets (trend) in FX.
Comment
⋅
A close-up (Weekly); Between now and September this pair - much like all FX, in general - could be rather tumultuous!
Comment
⋅
Let's be real! Real men don't trade instruments that resemble wall coverings in the process of dehydration. (Like the Nasdaq, bitcoin and similar bed time stories ;-) So, unhook grandma from the breathing apparatus and on the way home pledge your unborn children to a loan shark in order to raise the capital - which you will need! The average volatility of this pair is 22% so ... 'nuff said. Realistically, this pair represents "the best" vs. "the worst", the world has to offer, at present. (As the chart would clearly indicate.) A potential upside target is around +120% (total) thus, plenty of room left to run. Just remember; "There is no crying in trading!"
Comment
⋅
This is getting the full extension; Watch for a turn here - to get Long.
Comment
⋅
Mexico: Auto Exports (YoY): +14% Auto Production (YoY): +25% Humming right along ...
South Africa: GDP growth rate (Q1) - Previous; revised: -1.1% GDP growth rate (Q1) - Current: 0.2% (Wait until this gets revised, too, probably by +/-200%?? ...;-) There's yet to be an estimate of GDP growth at least within +/-100% of the effective range! (The kind of incompetence which reverberates throughout everything, tied to that country.)
Trade active
⋅
Following a brisk +53.67 moon-shot by the Mexican Peso over the S. African Rand ... ... this still leaves the Peso significantly undervalued relative to the Rand! So ... Now what??
Clearly, the USDMXN is not in the habit of changing direction a lot; ... however, this is where it should start to recover briefly - before continuing down. Buy it up LONG, for now.
Trade active
⋅
(Didn't realize until now that I forgot to include the Long Entry) Buy it up! - LONG
Trade closed: target reached
⋅
Having collected a quick +3350 pips, taking a quick pause for the cause. FLAT, for now. This USD rally is far from over and will jump back in (Long) on any pullback here.
Comment
⋅
This one really threw in the towel;
Trade closed: target reached
⋅
After a +4.5% move by-the-numbers ... ... it is time for a pause for the cause. FLAT
Trade active
⋅
The premier carry-trade MXNJPY; ... so it is also the premier target for a massive SHORT position, working it's way toward a full Weekly & Monthly reversal. (Which should cast a long shadow on equity indexes and the likes). There are miles and miles to go from here to the down-side hence, spent the better part of this week loading up Short on this one.
Comment
⋅
Mexico's yearly inflation rate dropped for the sixth month to 4.78%, the lowest since March 2021 and the core rate also fell to the lowest since February 2022.
Do you really believe the usd/mxn will fall that low? that would just make the mexican peso extremely expensive and uncompetitive. USA would be better off just building everything in-house with upcomming extreme automatization + AI.
Nemo_Confidat
⋅
@Sociablebear, I see it as rather reasonable. The base rate on the MXN has been 10-12! (Post Lat. Am. crisis) Where is all manufacturing, that is already bailing out of China, going? Surely not ever further into S.E. Asia which ceased to be competitive quite some time ago (including the impossibility of securing shipping/supply lines). Any American "manufacturing renaissance", which is already unfolding out of necessity, has only one potential main beneficiary, Mexico. (Still highly competitive even at $0.10) I am going to go out on a limb and make a prediction: There wont be a fundamentally new iPhone model until it's all assembled in Mexico, 3-4 years from now! (So take good care of all existing/old smart phones ;-) Supply lines matter! - More than ever before. Now that the world has learned that A) They don't just continue to exist, no matter what; B) When they cease/break there is no quick fix, if any at all. C) NAFTA will eat the World's lunch - whatever will be left of it in 2 years or so.
Sociablebear
⋅
@Nemo_Confidat I don't think that base rate will hold or even age well. Actually I am concerned on how the current government is supposed to pay for those rates with such a poor development execution (from the public sector). Due to policital and insecurity factors I believe that the real solution for the USA is to adopt extreme automatization and build everything in their own country. There is enough land to do it after all. In a few years cheap labor won't even matter, why not just make the great leap at once instead of wasting years into opening new factories in another developing nation?
Nemo_Confidat
⋅
@Sociablebear, Mexico definitely has it's problems, which are well known and long "accustomed to". However, in relative terms, like in comparison to China (or Indonesia or it's neighbors), it's Canaan on earth. Also, now demographics matter! Population distribution matter! Supply line stability (or even existence) matter! Mexico is the world's 12 largest economy not by accident. Market proximity is now the eternal goose that will lay the golden eggs, for decades to come. American Labor has no chance to revert to be "competitive", ever again - without a functional and lasting collapse of the entire US economy. I am simply not aware of any potential alternative, under any reasonable scenario, anywhere else in the world. (As always, I could be wrong, though. ;-) Currently, the fastest growing region in the world is ... Texas! - Soon to surpass the entire Russian (or Australian) economy. I'd take that as a sign of things to come - i.e., a trend.
@Nemo_Confidat than you for your insight! I will position accordingly to benefit from the USD/MXN swing
Nemo_Confidat
⋅
@Sociablebear, Cheers! (This is more of a long term, general overview, rather than actionable trading advice, at the moment.) P.s. As much as Obrador is clearly some version of a confused Peronista, he appears to be pragmatic, more often than not. Like, he essentially declared cease fire in the "drug war". He's right! - As long as it's is good for business ...
Nemo_Confidat
⋅
@Sociablebear, Just a quick follow up; Having just gotten off the phone with a commercial real estate broker in Mexico ... and I quote: "It is utterly absurd down here with everyone who is anyone bidding on non-existent (yet to be built) factories! And I mean from Blackrock to Chase, to seemingly every last private equity fund from California to Texas. All these bozos are wanting to buy stuff that simply does not exist! (Yet?) It is insane down here."
TheGringo1810
⋅
@Nemo_Confidat, : As a New Yorker in the “ Sticks & Bricks” Industry for over 30 years…(Now living in MX), It is a puzzle. Your thoughts are appreciated. -EML-
Nemo_Confidat
⋅
@TheGringo1810, Cheers! (Just remember; The fastest growing region in the world is Texas + Northern Mexico while S. Africa has permanent 6 hr. rolling blackouts. - That country can't afford electricity anymore.)