Forex Critical: British Pound and Mexican Peso – A Tale Of Resistance

In recent days I wrote about the British pound (FXB) and the Mexican peso. In both posts, I pointed out to resistance levels versus the U.S. dollar: GBP/USD and USD/MXN. In both cases, those resistance levels held.

In the case of the pound, the technicals held against major fundamental news: the Bank of England (BoE) actually hiked rates to reverse last year’s post-Brexit emergency cut. Yet, it seems the market was majorly disappointed with the snail’s pace of rate hikes outlined by Governor Mark Carney. In coming days, I will write in more detail about my takeaways from this apparent turning point.


The British pound versus the U.S. dollar (GBP/USD) sold off from stiff resistance at the converged 50-day moving average (DMA) and a key post-Brexit trading point.
The British pound versus the U.S. dollar (GBP/USD) sold off from stiff resistance at the converged 50-day moving average (DMA) and a key post-Brexit trading point.

In the case of the Mexican peso, the technicals provided successful resistance even as the U.S. dollar index held relatively steady. I point this out to recommend that traders with the shortest timeframes take profits here. I am continuing to hold and even anticipate a fresh slide in the dollar after the Fed (presumably) hikes rates next month.


The U.S. dollar versus the Mexican peso (USD/MXN) failed to break through a line of resistance that held three times across April and May. Could a fresh slide be around the corner as well?
The U.S. dollar versus the Mexican peso (USD/MXN) failed to break through a line of resistance that held three times across April and May. Could a fresh slide be around the corner as well?

Source for charts: FreeStockCharts.com

The next potential turning point for the U.S. dollar comes in the form of the U.S. jobs number for October. Economists are apparently projecting a major post-hurricane rebound, so expectations are very high. The dollar likely only has downside risk, especially after it barely budged in the wake of the well-anticipated announcement by President Trump of Jerome Powell, an Obama-era appointee to the U.S. Federal Reserve’s board of governors, as the next chair of the Fed.

Be careful out there!

Full disclosure: long and short various pairs including the British pound and U.S. dollar, short USD/MXN

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