The Mexican Peso pair was revolting against the sturdy 19.8712 resistance mark on Monday. After the surprise rate cut of 25 bps last week, the Mexican Peso currency had already lost most of its value. In the interim, the US Mexico Tomato Trade war was set to lapse tariff deadline today, elevating tensions for permanent tariffs on the tomatoes. Annually, Mexico exports approximately around $2 billion in tomatoes to the US. Hence, an immediate tariff imposition would significantly impact the Mexican agricultural industry and American supermarkets. As a result, the investor sentiment was severely hurt, allowing the USD/MXN pair to soar 1.03% reaching 19.8346 mark.
On the technical chart, the pair was forming a Fry Pan Bottom trading pattern since last three months. Meantime, a 19-day old ascending slanting support line remained stalled on the downside, preventing potential daily losses. Quite noticeably, the USD/MXN pair had already breached above the 19.8346 resistance handle.
The Ninja continued to stay within the lower vicinity of the Bollinger Bands, sustaining adverse price actions throughout the day. The USD/JPY pair was struggling to break and drift above the 106.742 resistance handle in order to get into the upper Bollinger Band. However, significant SMAs remained stalled on the upper side, disallowing positive price actions.
In the meanwhile, investors had expected the Central Bank to come up with some stimulus, catering the damages caused out of rising trade tensions. Even the pair had made a triumphant march above the 106.742 handle, then that would have enabled 109.048 resistance.
Fiber continued to slip for the fifth consecutive session today. At around 19:20 GMT, the EUR/USD pair bears were testing 78.6% Fibonacci Retracement level or 1.1081 level. On the economic docket, the downbeat Eurozone July Consumer Price Index (CPI) was something worth noticing that reported 0.1% below market hopes. Also, the July MoM CPI Core recorded -0.6% over 0.3% forecasts.
A slanting descending resistance line was already obstructing the upside. Anyhow, the Relative Strength Index (RSI) was pointing below 40 mark, revealing over-sold conditions. Notably, the MACD was showcasing a bearish crossover with both the MACD and signal lines below the zero line. Additionally, the red histograms of the MACD indicator were pointing to the south, entertaining the bears.
US Dollar Index
After bouncing off the 3:1 Gann line August 10, the Greenback had entered into the upper vicinity between 1:1 and 2:1 Gann lines. Such a positive move to the upside seemed to have pleased the DXY bulls. Interim, the MACD (Moving Average Convergence Divergence) indicator had showcased a bullish crossover with the MACD line moving well above the signal line. However, the US 3-month and 6-month Bond Yields appeared to decline this time.
The 6-month yield figure had reported near 1.89%, last time. Anyhow, the actual statistics recorded near 1.84%, below the prior data. Also, the 3-month Bond Yield came out 0.06% below the previous 1.96%. Any move on the downside would have got captured within the solid bottom shield formed out of an active support cluster, consisting of significant SMAs. The Parabolic SAR was also moving below the Greenback, providing some additional strength to the bulls.
This article was originally posted on FX Empire
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