USDMXN setting up for a potential long reversalThis is one of the setups I'm looking at for next week. The USDMXN on the daily has one of the cleanest trends of any pair recently. However, it has been overextended and is nearing the 200% Fibonacci extension level.
At the same time, there's a very strong demand zone close by, around the 18.30000 level. Last time that price dipped into this level, it shot up with an incredible force and it only makes sense if there would still be buyers left to pick up the price once again.
Technically, we can already see a slight RSI divergence and a slight slow down of the price, but nothing too much in terms of an actual reversal yet. Fundamentally, this setup would be aided by a strong US economy. So far, this is the case and a better than expected NFP release tomorrow would only help.
This setup still needs some more time and I expect this to unfold sometime next week. My alert is set around the 18.3 level.
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