08:14 GMT
Chart of Interest:
A week of patience as opportunities have slowed coming into Christmas…
UsdMxn has tested its Lower Bound implying (via options market) that near term downside is now limited
This is a market we have been tracking in the Daily videos which is now presenting a buying opportunity at a statistically significant area for anyone looking to be long UsdMxn
If we are heading into a Risk Off regime into Q1 (as looks likely) this is a market that will likely move higher as the Dxy catches a Safe Haven bid and the Mxn sells off as demand for Crude Oil drops. If this level holds this will represent a technical higher low with a break of the current highs around 19.91624 representing a major bullish breakout
In short, if this market is going to break higher on Risk Off in Q1, this likely represents the final opportunity to buy a pullback before the breakout.
I am now personally in this position (not a short term trade) with a wider stop although I don’t expect much to happen in markets next week (between Xmas and New Year). On balance, volatility is likely coming back into markets in the first week off January now…