FxNews – In this technical analysis, we will look at the EURMXN forecast, which is the exchange rate between the euro and the Mexican peso. We will use the 4-hour chart to examine the trend and the possible reversal points of the pair. We will also use the trendlines and the Fibonacci retracement tools to identify the key support and resistance levels.
FxNews – The EURMXN pair is showing a downtrend on the daily chart, as the euro is losing ground against the Mexican peso. The market is approaching the 61.8% Fibonacci retracement level, which is a key support zone. This level is also aligned with the median line of the bearish flag pattern, which is a continuation pattern that indicates a potential further decline. Moreover, this level coincides with the bullish trendline that has been supporting the pair since March 2020. This convergence of multiple technical factors makes this level a crucial pivot point for the pair.
The technical indicators are giving mixed signals about the direction of the pair. The awesome oscillator is shifting below the signal line, suggesting a bearish bias. However, the relative strength index (RSI), which measures the strength of the price movements, is approaching the oversold area, indicating a possible exhaustion of the sellers. Given that the RSI is a market strength indicator, it suggests that the EURMXN pair might enter a consolidation phase above the pivot point, rather than breaking it.
If the price manages to stay above the 61.8% Fibonacci support level, the pair might experience a pullback towards the higher levels of the Fibonacci retracement. The first resistance level to watch is the 50% level, followed by the 38.2% level. These levels might act as potential reversal points for the downtrend to resume.
On the other hand, if the sellers manage to push the price below the pivot point, the pair might extend its decline towards the lower levels of the Fibonacci retracement. The next support level to watch is the 78.6% level, which is also near the lower line of the bearish flag pattern. Analysts at FXNews recommend monitoring this critical level for further insights into the market direction.
J.J Edwards is a finance expert with 15+ years in forex, hedge funds, trading systems, and market analysis.