USD/MXN Price Analysis: Mexican Peso eyes recovery with spinning top on D1 chart
- Tuesday's spinning top candle suggests buyer exhaustion in USD/MXN.
- Mexican peso could witness a notable oversold bounce in the interim.
USD/MXN created a spinning top candle on Tuesday, which occurs when the pair sees wild swings in both directions before ending the day with moderate gains/losses.
The spinning top is indicative of buyer exhaustion and validates the extreme overbought conditions signaled by the 14-day relative strength index.
As a result, the Mexican peso (MXN) could see a notable bounce, pushing USD/MXN lower. At press time, the pair is sidelined around 22.92, having hit a record high of 23.3190 on Wednesday.
A close below 22.4586 (Tuesday's low) would confirm a bearish reversal spinning top pattern and open the doors for a slide to the March 16 low of 21.3927. Alternatively, a close above Tuesday's high of 23.2319 would imply bullish continuation.
Daily chart
Trend: Pullback likely
Technical levels