As of this writing the USD/MXN is close to the 18.96700 level with rather a fast price action being displayed. After selling off last Friday and falling to a low of nearly 19.12000 the USD/MXN has largely been able to demonstrate the ability to incrementally trade lower this week. Late yesterday the USD/MXN was able to break through the 19.00000 level, which shows behavioral sentiment remains bearish particularly because the currency pair sustained its depths early this morning.
Important U.S inflation data will come from the U.S today and this should make speculators take notice. Technical traders who do not look at fundamentals may want to at least acknowledge the Consumer Price Index statistics which will be published in the U.S., financial institutions will certainly be paying attention and reacting to the inflation numbers results.
The USD/MXN has been able to exhibit a large amount of selling momentum the past month and the currency pair is next to early coronavirus price points not seen since early February 2020. Technical traders will have to look at 5-year price charts of the USD/MXN to gain perspective regarding where the Forex pair may eventually find equilibrium if the selling trend continues.
The USD/MXN was briefly above the 22.00000 ratios in the middle of November 2022
Holiday trading over the past few weeks continued to prove the USD/MXN was selling in a rather consistent manner. On Thursday of last week however the USD/MXN did climb upwards and touched the 19.43000 realms. This move higher was rather tame considering the USD/MXN near-term price range, but when last Friday’s lower than expected U.S Hourly Average Earnings have released this lit the ignition switch for more selling. The fact this happened as volumes were increasing in Forex as financial institutions returned to their trading desks, cemented the notion the USD/MXN continued to be in a bearish trend.
- If the 19.00000 mark can be sustained as resistance in the short term this will be an intriguing technical consideration. However, traders should certainly be ready for volatility later today upon the release of the U.S. CPI data.
- The near-term price range of the USD/MXN will likely widen over the next twelve hours as trading houses place their Forex positions and react to the outcome of the U.S. data.
Speculative Positions need Solid Risk Taking Tactics Today in the USD/MXN
Traders who want to bet on more downside price action may want to use rather narrow take-profit orders to cash out of their positions quickly. Before the U.S Consumer Price Index numbers are published Forex will become fast and prices will fluctuate rapidly. Small-day traders may be wise to remain spectators until the U.S. data is published and simply watch from the sidelines. If the inflation data from the U.S. is weaker than expected, this could cause additional selling of the USD/MXN, but traders need to be careful as larger institutions maneuver in the short term.
USD/MXN Short-Term Outlook:
Current Resistance: 19.02250
Current Support: 18.92100
High Target: 19.18900
Low Target: 18.85000
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