Global macro overview for 27/01/2017:
After decades of friendship and economic partnership, the U.S. and Mexico relations plunged into turmoil after Mexican President Enrique Pena Nieto canceled his trip to Washington after his U.S. counterpart Donald Trump has significantly increased his campaign pledges to revise the North American Free Trade Agreement and charge the U.S. Southern neighbor to build a border wall. This conflict might quickly escalate to a full trade war, especially after Trump idea of imposing a 20 percent tax on all Mexican imports. In conclusion, the U.S.-Mexican economic interconnections are very deep, so it might be nearly impossible to pull them apart without serious political or economic unrest.
Let’s now take a look at USD/MXN technical picture in the daily time frame. The market recent top at the level of 22.037 might still not be the termination of the long-term bullish trend. So far, the price is trading above the 50 and 100 daily moving average and there is no evidence of any trend reversal as the sequence of higher highs and higher lows remain intact. The next important support for the bulls is seen at the level of 20.114 and the next resistance is seen at the level of 21.460.
The material has been provided by InstaForex Company – www.instaforex.com
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