The USD/MXN has delivered a solid reversal lower which has created lower values that are again challenging early December prices.
As of this writing the USD/MXN is trading near the 19.39100 ratio, which is a stark contrast to the fact the currency pair was near the 19.89775 mark on Tuesday of last week. The USD/MXN has been able to break its consolidation which saw a buying spree emerge essentially starting on the 5th of December and holding a higher price range until last week.
Before that climb in value from the USD/MXN, the lower depths being trading the last week of November and the first week of December had last been seen in March of 2020. However, experienced traders will note that the selling surge which generated power as of Tuesday last week and broke the higher consolidation, occurred as trading volumes grew thinner because of the Christmas holiday.
The Value of the USD/MXN appears to be a Fair Technical Price
While the move lower in the USD/MXN certainly may look like a realistic price for the currency pair taking into consideration its performance the past year, it may not be that simple. Speculators who are willing to bet on more downside momentum developing this week must consider the absence of large institutional financial houses, which many will not return until the end of the New Year’s holiday. This means trading results in the near term must be treated with a healthy dose of skepticism.
- The 19.35000 may prove to be of importance as short-term support for the USD/MXN, if this ratio is broken lower it could set off price targets near the 19.32000 to 19.30000 marks.
- Because of the holiday and thin trading volumes, speculators must be prepared for quiet Forex markets which can suddenly create volatility if a large commercial transaction takes place.
The Bearish Trend is Attractive in the USD/MXN however it may not be Full Proof
Last week’s bearish price action in the USD/MXN may have confirmed the technical and fundamental perspectives among many traders. However, the selloff occurred in a thinly traded market which may lead some speculators to believe that the bearish direction was too strong. The near term will likely produce choppy results and the potential for reversals to be exhibited. Nearby resistance levels may prove attractive for speculators who are looking for quick-hitting narrow moves upward.
USD/MXN Short-Term Outlook:
Current Resistance: 19.41200
Current Support: 19.35100
High Target: 19.49100
Low Target: 19.31010
Ready to trade our daily Forex forecast? Here’s a list of some of the best Forex brokers to check out.