So you’ve spent a few days getting to know your MetaTrader trading platform, and now you’re wondering which pair to trade. You’re not alone. The major pairs are usually the more appealing targets for traders of all levels. This is due to the high liquidity and low spreads that popular trading pairs offer. Unfortunately, trading conditions on the majors are getting a little more volatile than usual as the political conflicts of 2019 continue to drive sentiment. So if you’re not trading a major currency, then what? How about the Aussie dollar against the Mexican peso?
AUDMXN: the long trend
Let’s leave GBP and EUR to Brexit, and USD to Trump for a moment and move to an unlikely pair. The Australian dollar and the currency of Mexico, the peso. Firstly, you should know that the Aussie dollar is currently the 5th most popular trading currency in the world. Alternatively, the Mexican peso is fluctuating at number 15 most traded currency worldwide. The peso is also sitting at the top of the podium of Latin American trading, suggesting that MXN is a relatively overlooked currency that has a much bigger punch than you might think. There is liquidity, but there is also volatility, so why is AUDMXN a consideration?
AUDMXN has been consistently rising for over twenty years, but a look at an up-to-date price chart tells a different story when setting shorter time periods. At the end of Q4 2018, the resilient upward trend that AUD enjoyed for so long seemed to be slowing and leveling off. In recent months a slight downtrend in AUDMXN has appeared. On a rollercoaster ride, this would be the part where everyone who bought a ticket starts screaming. Is this the beginning of a reversal?
AUDMXN technical analysis
On the D1 (daily) chart, prices are bouncing from lows around 13.45 up to highs around 13.80 pretty much every week. Not exactly price swings that create huge profits. But if the tide really is turning, the Mexican peso might well reach Oct 2018 lows of 13.26 to AUD. This would obviously make a Sell order the money maker, but remember to be cautious. While the long-term trend could be flipping, the monthly chart recently shows the pair to be in a biannual valley. If history repeats, we could see an epic rise comparable to April and October last year.
AUDMXN fundamental analysis
Currencies are usually being pushed and pulled by politics and economic releases, but looking for something in the economic calendar to make sense of AUDMXN is perhaps being naively optimistic. A review of previous news for the Australian dollar and Mexican peso shows that prices rarely react to national reports and economic updates. It seems MXN is being guided by forces not so easy to pinpoint. Daytraders can still enjoy the midweek highs that have been showing up, though.
The big picture for Aussie dollar-Mexican peso
Even though technical and fundamental analysis give no concrete indicator of what's coming over the next few weeks, the overall long-term upward trend does appear to have lost momentum, and that’s not something to be ignored. If you’re thinking about trading AUDMXN, take into account that a long-term downward trend might be underway, but an indicator of one last rise before the fall should be considered a real possibility.
To be in a position to act on either a rise or a fall, set up an account with Exness and start following AUDMXN every day.
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