The USD/MXN is trading near the 18.73600 vicinity early this morning with quick fluctuations being produced in the currency pair, this as it traverses lower values not seen since the third week of August 2024.
Last week’s higher value in the USD/MXN which tested the 19.30000 plus level on Monday has quickly vanished. The currency pair has reversed solidly back into its lower range. Upon breaking below the 19.00000 ratio again last Wednesday the USD/MXN has continued to show an ability to continue its bearish trend which has been in effect solidly since the second week of April.
Selling behavioral sentiment in the USD/MXN has certainly improved. This has been helped by less noise via tariff bluster between the U.S and Mexico and via more calm being achieved within financial institutions. The USD has been weaker across Forex and the USD/MXN is correlating to this price action. Important support levels are in focus as important near-term risk events are on the horizon.
18.70000 as Support and Thoughts of Lower Values
The U.S will publish it Non-Farm Employment Change numbers on Thursday of this week. The 4th of July holiday in the U.S will create quiet global markets on Friday. Meaning Forex price action will be potentially volatile as financial institutions position for a long weekend ahead. The value of the USD/MXN may also react to the U.S budget bill being argued in the Senate today and possibly into Thursday.
Until the U.S spending bill is approved the USD/MXN may see some choppy trading as risk appetite refuses to act in a large fashion. The current prices of the USD/MXN has produced a significant bearish trend lower, but financial institutions may become rather cautious in the near-term as they wait for risk events in the U.S to pass. The jobs data, spending bill are important, but so is the approaching tariff deadline on the 9th of July highlighted by President Trump. Volatility may spring to life again in the near-term and traders have to remain alert.
Speculative Considerations in the USD/MXN
If the USD/MXN suffers from risk adverse volatility, speculators who are conservative may see this an opportunity to try and wager on higher values which suddenly test perceived technical ratios. If the USD/MXN moves above 18.77000 to 18.80000 over the coming days this may open the door to the potential of trying to seek lower momentum again.
- The problem for day traders will be about timeframes.
- Being able to hold onto a bullish USD/MXN and having enough money to withstand the strong upwards climbs in which reversals lower are sought could prove difficult.
- Intriguingly for the moment, the USD/MXN is touching important lower values as risk events are clearly on the horizon.
- Perhaps optimistic financial institutions are wagering on good results across the board via the U.S spending bill being passed and tariff deadlines not causing much fury.
USD/MXN Short Term Outlook:
Current Resistance: 18.74200
Current Support: 18.73100
High Target: 18.77100
Low Target: 18.70400
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