The USD/MXN is near the 19.86200 mark as of this writing, as the currency pair now trades within sight of important mid-term support ratios. Only last Friday on the 21st of October the USD/MXX was near the 201.13000 vicinity after it had fought off lower depths near 19.95000 on Tuesday the 18th. Price action continues to demonstrate the ability of the USD/MXN to maintain a known value range.
Now the Question is if the Known Price Realm of the USD/MXN is about to Change
The USD/MXN has delivered a rather solid trading area for speculators to take advantage of resistance and support levels since the beginning of October. A rather steady range between 19.94000 to 20.18000 has played out rather effectively. While it is difficult to catch reversals, day traders who have had the ability to use resistance levels to ignite selling positions may have found worthwhile wagers to brag about regarding results.
However, after breaking below the 19.95000 level late on Monday of this week, the USD/MXN has not shown much desire to reverse higher. Monday’s poor Services PMI numbers from the U.S, showed less buying optimism from purchasing managers. Yesterday’s Consumer Confidence numbers from the U.S also came in less than forecasted.
These two economic indicators have led financial analysts far and wide to suggest the U.S is headed for a recession. Because of the ‘recessionary’ outlook building among financial houses, they are starting to believe the U.S Federal Reserve will become more dovish regarding interest rate policy. If the U.S central bank starts to put the brakes on hike borrowing costs, the USD/MXN will be affected.
Will Key USD/MXN Mid-Term Support Hold or will it become Vulnerable?
The 19.85000 to 19.84000 price ratios now acting as support should be watched in the near term by speculators who like short term wagers. The last time the USD//MXN saw the 19.84000 realm for a duration was on the 22nd of September. The USD/MXN traded below the 19.84000 to the 19.76000 realm on the 12th of September.
- Behavioral sentiment may be shifting, but for the USD/MXN to break below critical support and remain within lower depths remains a speculative perspective.
- Traders need to be careful near the current support levels and the near term may present a price range between 19.84000 to 19.90000.
Short term traders may be able to take advantage of a narrowing price range in the near term if financial houses believe the U.S Fed will have to lessen its hawkish interest rate ambitions. Quick hitting trades which take advantage of targeted values which technically appear close may be a logical bet for speculators. Conservative leverage along with take profit orders that cash out winning wagers when they are achieved are highly encouraged. The USD/MXN may drift slightly lower near term, but reversals upwards will be seen certainly, so patience and solid risk-taking tactics are needed.
USD/MXN Short Term Outlook:
Current Resistance: 19.89900
Current Support: 19.85100
High Target: 20.01100
Low Target: 19.80600
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