The USD/MXN moved lower again on Monday and has managed to sustain its long-term depths in early trading this morning.
The USD/MXN is near long-term lows which have not been seen since January of 2020. In other words, the USD/MXN is now testing values pre-coronavirus chaos and speculators literally need to start engaging five year charts to try and gather technical evidence regarding potential perspectives of financial institutions.
The USD/MXN bearish trend has seen momentum build since Friday. The USD/MXN has been an outlier the past year, this as the MXN has been one of the few major currencies to repeatedly gain strength against the dollar. The past few days of trading have not been spurred on by stronger Crude Oil prices, the price of energy has actually gotten quite cheaper in the past month.
Bearish Trend of the USD/MXN is Speculatively Enticing
Speculators who have continued to wager on downside momentum in the USD/MXN have likely done well. Support levels continue to prove they are vulnerable. The fact the USD/MXN is now challenging values from nearly three years ago is intriguing and picking targets below to pursue may be a guessing game technically, except to say traders should remain realistic.
The move lower on Friday from a high of nearly 19.42000 to 19.30000 was steep. Yesterday’s ability to decline further has the USD/MXN now trading near the 19.27000 mark, meaning traders should be willing to use quick hitting take profit orders to cash in profits when they occur instead of watching reversals higher erode value.
Full Trading Volume and Central Bank Rhetoric make their Return
Full trading volume will return to the USD/MXN today as financial houses in the U.S come back to normal after the long holiday weekend. It should also be noted that some U.S Federal Reserve central bank members have tried to pour cold water on hopes the Fed will suddenly reverse its interest rate policy. These two factors could cause a bit of headwinds momentarily for the USD/MXN bearish trend.
- The 19.26000 to 19.25000 levels may be close, but they could prove to be significant short term support. A move below this would be intriguing and show selling sentiment is strong.
- The 19.30000 level as resistance is rather intriguing and may be a short-term target, if this level is not able to be penetrated higher it would signal financial houses are comfortable where the USD/MXN is situated for the moment.
Traders should be ready for dynamic consolidated movement in the USD/MXN as it fights in the lower realms of its long-term value. Speculators may want to use resistance above as a way to open their selling positions. The near-term may produce a test of the current price range which can be taken advantage of by technical traders looking for price action between the 19.26000 and 19.29000 range. However, consolidation often does not hold, so caution and stop losses are advised.
USD/MXN Short-Term Outlook:
Current Resistance: 19.29000
Current Support: 19.25000
High Target: 19.36200
Low Target: 19.19500
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