The USD/MXN is within the higher part of it near-term trading range, and as of this morning is around the 20.42000 vicinity.
Early trading this morning in the USD/MXN has seen the currency pair challenge near-term higher values. As of this moment the currency pair is around 20.42000 while producing some momentum upwards. The USD/MXN is essentially testing a value range it saw displayed late on Friday before going into the weekend. Earlier on Friday the USD/MXN was trading near the 20.30160 ratio.
However, upon touching the lower depths on Friday, the USD/MXN then began to see a climb higher. While some may say that this movement occurred because financial institutions remain cautious regarding the ability of the USD/MXN to consistently trade below 20.25000 the past couple of months, some of the buying generated on Friday and possibly early today may have more to do with nervous results seen in U.S equity indices recently.
Risk Adverse Short-Term Results and the USD/MXN
The low for the USD/MXN last week happened on Tuesday and Wednesday when the 20.20000 to 20.19000 ratios did see momentary flirtations. However, trading did push higher after these brief encounters with one month lows. The USD/MXN did touch the 20.14000 ratio on the 24th of January, which it should be pointed out was a Friday. The USD/MXN jumped higher after that late January weekend and on the 27th of January essentially was trading near a price realm now occupied.
The reason the above is pointed out is because USD/MXN behavioral sentiment remains crucial. While certainly improved after the early February attack higher, which was propelled because of concerns regarding tariffs and saw the 21.30000 ratio come into sight, the USD/MXN has calmed down considerably. The ability to traverse within the higher edge of its near-term values may have more to do with a correlation regarding risk adverse sentiment and cautious approaches being taken before U.S equity markets open this morning.
USD/MXN Current Trading Range and Opportunities
Traders should be careful and watch the U.S equity markets early today. The last two days in U.S indices saw declines and this may have spurred on some buying of the USD/MXN as a simple risk adverse move via stronger USD centric action.
- Resistance levels around the 20.43000 to 20.44500 levels look to be important for the short-term and if they prove durable may spur speculative positions which seek a slight downturn.
- However, if U.S equity markets open nervously and see additional selling today, this could spark a challenge to resistance and consideration of slightly higher moves.
- Looking for downside in the USD/MXN may feel like the logical speculative wager for aggressive traders, but they should not get overly ambitious and look for quick hitting targets.
USD/MXN Short Term Outlook:
Current Resistance: 20.42900
Current Support: 20.41700
High Target: 20.45100
Low Target: 20.38700
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