Bulls and bears are fighting it out
The commentary out of "NAFTA" is that Mexico will be the first to come to an agreement. In that respect, it is not NAFTA but a bilateral deal. Canada is off on the side dealing with their own issues with the US (including the sunset clause).
The good news, has the USDMXN moving lower. Looking at the daily chart above, the price is well off the 2018 high and is testing a swing area going back to Feb around 18.4999 area (at least it was at the start of the week. It is also trading near the underside of a broken trend line at 18.5390 area. That is a support area now and going forward. Stay above, and there is corrective potential. Move below and it is more bearish.
Drilling to the hourly chart below, the pair is currently down testing the 100 hour MA (at 18.6084 level) and a lower trend line at 18.6046. The low just reached 18.5950, below those levels but the price is trying to stall (i.e, momentum is not racing yet).
The buyers are trying to hold that line. If it can hold, the upside can continue to try and build a low (with the daily helping). If it can't I have to give the sellers the benefit of the doubt (at least down to the levels on daily).
On a move higher is it green grass ahead?
No. The high today stalled around the 38.2% and a topside channel trend line. The price also failed on the break of the 200 hour MA (green line in the chart below). So those levels (at 18.6977, 18.75191 and 18.7678 (and moving higher).
Tempted to go against the buy MXN trade agreement trend. This is an area to sell the MXN/buy USDMXN Risk is defined and limited.
However, be aware that the MXN sellers (USDMXN buyers) may be trying, but they still have work to do.
So watch the levels, listen to the price action and the technicals. If they start to break to the downside for the pair, look to coverup. There will be other opportunities.
