Second half of the January is very good for the Mexican Peso but it looks like we finally found a place, where this appreciation may come to an end. We are exactly there just now – 20.8 , as that is the area where multiple supports meet in one place.
First of all, we do have a horizontal support created by the tops from the whole December. That level was already tested in the last week and brought a nice temporary upswing, so we know that traders are aware of this level. Furthermore, we do have a mid-term (from November) trendline here (black), connecting recent higher lows. In addition to this, we can spot a correction equality movement (yellow areas), which proved to be effective many times on many instruments and timeframes.
On the paper, we should reverse now but that is just the theory and the reality can be different. There is still a chance for a breakout but for a good trader this is an additional opportunity. By now, you know, what is the level to look at in the next few hours and when the price can significantly accelerate. You can use that in your favour when for example placing pending orders. As long as we stay above mentioned supports the buy signal is still on the table. Once those will be broken, bearish sentiment will emerge. 