Our expectations indicate more decline for the index during its upcoming trading.

The Dow Jones Industrial Average declined during its recent trading at the intraday levels, to record sharp losses in its last sessions, by -1.56%, to lose the index towards -491.27 points, to settle at the end of trading at the level of 30,947.00, after its rise in Friday’s trading by -0.20 %.

The Conference Board’s Consumer Confidence Index in June fell to a 16-month low of 98.7, as Americans grew increasingly concerned about rising gas and food prices and the health of the economy. Economists polled by the Wall Street Journal had expected the index to fall to 100 from a revised 103.2 in May. Meanwhile, the Richmond Fed Manufacturing Index came in at -19, the lowest reading since May 2020.

New York Fed President John Williams said in a TV interview that he expects the US economy to slow, but not stagnate as the central bank aggressively tightens monetary policy in an effort to curb inflation. Williams said he expects policymakers to discuss whether to raise interest rates by another 50 or 75 basis points when they meet in July, after providing a 75 basis point increase earlier this month, the largest since 1994.

Technically, the index’s decline came amid the dominance of the short-term corrective bearish trend along a slope line, as shown in the attached chart for a (daily) period. The continued negative pressure of its trading below the simple moving average for the previous 50 days. This came despite the influx of positive signals with relative strength indicators, the indicator surrenders to negative pressures.

Therefore, our expectations indicate more decline for the index during its upcoming trading, especially in the event of its stability returning below the main support level 31,000, to target the support level 29,653.30.

The US dollar has fallen again during the trading session on Thursday against the Mexican peso, as we have reached the 200 Day EMA. This is obviously a very important technical indicator, so it will be interesting to see whether or not this holds as support. Furthermore, this is an area that has been somewhat important in the past, so be an area to pay close attention to.

The Mexican peso is somewhat correlated to the crude oil markets, and as we have seen a recovery in that market, it does make a certain amount of sense that we would see the Mexican peso strengthen. Furthermore, this pair also has a lot of noise in it due to the fact that a lot of remittances from Mexican laborers will have a certain amount of influence, but at this point, I think it is probably more about the macroeconomic crude oil situation than anything else. Keep in mind that a lot of Mexican oil ends up in the United States.

If we break down below the 20.50 pesos level, then it is likely that we will then reach the 20.25 pesos level. That is an area that has been support a couple of times, and with even the site of a double bottom previously, so that should be an area of significant demand. Anything below there would open up the trapdoor for a move down to the 20 pesos level.

On the upside, we need to break above the 20.75 pesos level to start buying, but at that point, I think we would probably make a beeline to the 21 pesos level. Ultimately, this is a market that is going to move not only on the US dollar itself, but the crude oil markets so there are a lot of headwinds in both directions. We got parabolic there for a while, and now we have corrected this move completely. The next day or two should be rather crucial, and risk appetite could again come into play so keep that in mind as well. It is worth noting that this pair tends to be very volatile at times, so keep your position size reasonable, and respect the fact that it is an exotic pair. Because of this, money management is crucial when trading this market, right along with any other exotic currency pair.