The USD/MXN has correlated to the broad Forex market, and has seen selling bring the currency pair back to important January support levels which technical traders will now have to interpret.
As of this morning the USD/MXN is trading near the 20.37785 ratio with a wide spread via bids and asks. Traders need to remember U.S banking institutions will be closed today because of a holiday and this means volumes in Forex, including the USD/MXN, will be limited today. However, the ability of the USD/MXN to move lower on Thursday and Wednesday of last week is noteworthy.
The broad Forex market has seen major currencies mostly gain against the USD since the beginning of last week. Nervous sentiment certainly still is abundant in financial institutions trying to gauge their outlooks, but after the momentary chaos that was seen globally in Forex on the 3rd of February, tensions have decreased. This doesn’t mean the notion of tariffs has been forgotten by the Trump administration, it simply means negotiations are known to be underway and that has created some tranquility.
USD/MXN and Higher Realms as Speculation is Considered
Yes, the USD/MXN has been able to come off highs, the 21.25000 mark in the currency pair seen on Monday the 3rd of February will not be forgotten soon. However, the starting point for the gap higher in the USD/MXN which was seen on Thursday the 30th of January and into Friday before going into that weekend, intriguingly enough is pretty much where the USD/MXN is trading now.
Because of the U.S holiday speculators need to be careful about wagering today. The USD/MXN may see rather volatile moves which should be considered suspicious, but the opening of trading tomorrow needs to be monitored as the U.S financial institutions re-enter the landscape. The U.S saw higher than expected inflation numbers last week via the CPI and PPI, yet the USD/MXN continued to show the ability to remain within a stable and known price range. Highs of 20.60000 were tested on Thursday, but after the highs incremental selling developed.
Resistance Levels Near-Term in the USD/MXN
The 20.40000 level should be watched by speculators of the USD/MXN today and tomorrow. If trading manages to stay below this level and starts to take the look of resistance in the near-term, this would be an interesting development regarding behavioral sentiment.
- Mexico’s rather loud negotiations with the U.S remain a difficult challenge.
- But as long as financial institutions see promise that the two sides are speaking this may help chisel some more value off of the USD/MXN via the risk premium which was certainly priced into the currency pair.
- Targets below should not be overly ambitious when traders are active, it may be best to aim for quick hitting ratios that cash our profits in the near-term.
USD/MXN Short Term Outlook:
Current Resistance: 20.39500
Current Support: 20.37300
High Target: 20.43000
Low Target: 20.33500
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