The USD/MXN is near the 19.93000 level as of this writing, and intriguingly within the past handful of days the trading range for the forex pair has gotten tighter. While consolidated price bands are always a signal and warning sign that a breakout can occur, they are also tempting for speculators who like quick hitting trades and do not have the desire to partake in a marathon long endeavor.
Traders who want to use current support and resistance levels as take profit and stop loss ratios may find an opportunity to take advantage of the natural reversals being displayed in the USD/MXN. Traders need to be careful not to churn themselves with a vast array of day trades which do not produce profits, but instead create huge transaction costs within their accounts. Therefore speculators who want to trade the USD/MXN should also make sure they do not grow too enthusiastic, while remaining goal oriented.
Support near the 19.90000 juncture remains rather promising for the USD/MXN and the 19.88000 mark below has proven rather capable of creating upward momentum. These support ratios are higher than what was forecasted here last week. Resistance also has proven durable around the 19.94900 mark and traders may believe the 1.95000 to 1.97000 junctures may continue to demonstrate a capable trigger to cause bearish movement if they are tested.
The tight range within the USD/MXN must be treated carefully because it can obviously erode in a moment’s notice. From a risk reward perspective regarding which direction the forex pair could move more dramatically, while it might be easy to say that bearish movement remains tantalizing and the choice, support levels have proven quite strong. Meaning the upside may actually produce the bigger move if a breakout were to be demonstrated short term, thus traders should remain alert and keep their ambitions realistic.
Selling the USD/MXN on slight reversals higher may prove to be the correct speculative decision at this point. The USD has shown some weakness in the broad forex markets and this may continue to be demonstrated. While the USD/MXN has certainly produced a consolidated price range, taking advantage of the forex pair by selling it when resistance levels are touched may prove to be the correct speculative decision.
Mexican Peso Short Term Outlook:
Current Resistance: 19.97600
Current Support: 19.89400
High Target: 20.03000
Low Target: 19.84100
