The USD/MXN is near the 18.59250 ratio in early trading this morning, as fast changes in value are being seen in the currency pair and the broad Forex markets shows signs of velocity.
The USD/MXN has seen strong selling emerge early this morning on the news that the E.U and U.S have reached a trade agreement. Forex markets are fast and speculators should prepare for price velocity which may look attractive, but could also prove very expensive if a sudden spike works in a direction not taken by a trader. The USD/MXN is near the 18.59250 ratio, but the spread appears to be wide as Forex brokers are also showing signs of cautious sentiment.
While optimistic energy has been generated by the E.U and U.S tariff agreement. The USD/MXN and other major currencies still need to wait for the Federal Reserve’s interest policy statement this Wednesday. Also more tariff news will be heard in the days ahead and the U.S jobless numbers are this Friday. Thus a week of fireworks should be expected in the USD/MXN which will certainly get a lot of the speculative attention as it traverses currently within the lower elements of its long-term range.
Reversals and Spikes and Risk Management
The USD/MXN is a highly traded currency pair. Though some day traders may view the Mexican Peso skeptically because they have little to do with it that they are aware of, the USD/MXN is ranked as the 12th largest currency pair traded in Forex. The political ramifications between Mexico and the U.S certainly move the value of the USD/MXN, but the pair also correlates to the broad Forex markets well.
Trading this morning took the USD/MXN to a low of nearly 18.50500 momentarily which had last been seen in early August of 2024. The USD/MXN has not traded below the 18.50000 level in a sustained manner since June and July of last year. The ability of the USD/MXN to trade near its current lows shows a lot of risk premium has been discounted. However, there are still risk events which were pointed out above via the Fed, tariffs and jobs numbers for day traders to remain nervous about their affects in the coming days.
USD/MXN Near-Term Speculation
Having found lower depths early this morning and then producing a reversal higher is interesting. The question some speculators may ask is how high the upwards track will now go before resistance kicks in. The USD/MXN will be volatile in the short and near-term.
- Certainly the U.S and Mexico are within the spotlight of tariff developments, but financial institutions may have already factored that knowledge (and fear) into the currency pair.
- Traders wanting to look for lower values should be careful.
- Perhaps a correct conservative approach to the USD/MXN over the next couple of days will be to try selling the currency pair when perceived highs have been hit, and then looking for quick hitting moves lower.
USD/MXN Short Term Outlook:
Current Resistance: 18.61400
Current Support: 18.58200
High Target: 18.66700
Low Target: 18.52400
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