Usually, I am a buyer of descending (or falling) wedges when we reach support, as I typically would be looking for an eventual breakout higher. However, this time may be different. The reason why is, as we are hitting support, the pair is also trading below the long-term 61.8% Fibonacci retracement of the February 2020 lows (pre-COVID) to the April 2020 highs (post-COVID lockdown). The MXN has outperformed during a "risk off" market recently, which is also a risk, especially if stocks overall maintain stability or rally. For now, while below the 200-day moving average, I will remain bearish EUR/MXN, unless we see a major breakdown of equity markets globally.
Chart of the Day : EUR/MXN
