The USD/MXN is trading near the 17.11085 mark as of this writing. The currency pair went into the weekend near a ratio of 17.05500 after touching a high of almost 17.12700 earlier on Friday. However, on Thursday of last week, the USD/MXN was near a low of almost 16.71150.
Job numbers on Friday from the U.S. actually came in weaker than anticipated depending on perceptions. The Average Hourly Earnings came in below its estimate. While the Non-Farm Employment Change result was slightly higher, the previous month’s result was revised lower. However, the USD got stronger going into the weekend.
Weak U.S. Data Didn’t Hurt the USD at the End of Last Week
The USD/MXN climbed and correlated to the broad Forex market, the USD got stronger against most major currencies. Even growth numbers from the States were weaker than anticipated via the GDP results earlier in the week. The notion that holiday trading affected the USD/MXN is a potential consideration and one that speculators with experience may seize upon as they wager.
The potential that lighter than normal trading volumes left the USD/MXN vulnerable is a possibility. The USD/MXN broke through near-term resistance easily and the price velocity higher was fast. The U.S. is on holiday today because of Labor Day celebrations, meaning volume will remain light again. Only tomorrow will Forex return to full trading and this should be anticipated by traders because there is a distinct possibility volatility could develop tomorrow as U.S financial institutions return in force.
The notion that Thursday’s and Friday’s move higher happened because financial houses are nervous is legitimate, but there is also a possibility the buying may have been overdone and that downside price action may develop in the USD/MXN sometime tomorrow. Speculators who want to pursue downward price action may look at one-week charts and find them appealing. However, risk management will be needed, because if the move higher is legitimate and is sustained on Tuesday and Wednesday of this week, this could prove painful for traders who are not using stop-loss orders.
Crude Oil Prices are Higher but the USD/MXN is Near an Important Resistance
- Intriguingly, the USD/MXN also went higher as the price of Crude Oil sustained mid-term highs late last week, which doesn’t exactly correlate.
- There will be a lack of important U.S. data near-term and the USD/MXN will likely trade according to behavioral sentiment conditions in the broad markets.
USD/MXN Short Term Outlook:
Current Resistance: 17.12960
Current Support: 17.08700
High Target: 17.20220
Low Target: 16.97300
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