Business confidence was released yesterday for Mexico at 54.20 with a forecast of 52.30. The Peso then weakened straight after the release and has continued its rise today. True we did get some positive PMI data from the US, but it was also pretty much as expected. This pair has been in over bought territory for some time. On the day chart 5 candles back you can see an upside down hammer, which then gave way to a large decline next day. I see strong resistance on the high of that candle at 16.4888 A new close above that level could lead to new highs, but my guess is price won’t get passed it, which should lead to a correction. Price on the day chart is above 5% away from the Ichimoku cloud and on the weekly chart is 13% away from the cloud. The cloud acts like a magnet meaning that when price drifts too far away it will begin to retrace to the cloud.

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