USDMXN bullish flag is in play
USDMXN is pulling back to 22-22.30 support inside the forming bullish wedge. We are within a flag with well-defined breakout levels for the extension higher and a downside reversal breakout lower. For the upside reversal from here, we need to see a price action continuation above 22.70 for a swing higher to 24.200. Breakout downside reversal long-term will come upon a break below 20. Near term, this bounce could lead to a bullish flag swing high.
On a daily chart, we can see that the pair is going for another test of the 22-22.30 zone support. We need to see a daily price action bounce from here. You can go long here with the stop loss just below 22. Our trading system is indicating a potential of 250-500 points of profit. Look for the long trade entries invalidation to come only on a clear daily close below 21.80.
We have used the combination of the top-down trading analysis to get these key levels explained in the charts.
