The USD/MXN continues to demonstrate its rather bearish trend remains speculatively intriguing. The USD/MXN as of this writing is near the 17.07890 mark with rather quick price action. The return of full volume in the Forex markets today and tomorrow should prove interesting. The USD/MXN did see some buying develop early last week after touching a low on Tuesday, but the upwards movement did not last long and incremental selling began to show force.
This will be an important week of economic data, U.S Federal Reserve rhetoric, and whispers about energy prices. However, the USD/MXN has also shown that behavioral sentiment remains rather actively aggressive and is showing growing risk appetite. The price range of the USD/MXN last week was rather limited and its range from vicinities of 17.07000 to 17.26000 may prove to be a source of comfort for speculators. The question is what will happen next in the currency pair.
Lows in the USD/MXN Build Intrigue
While U.S data this coming week via growth and inflation numbers will certainly factor into the USD/MXN, the recent trading of the currency pair has been given impetus because financial institutions have started to show signs that the USD was believed to have been overbought in the broad Forex markets. Yes, economic data from the U.S has to continue to turn in numbers that financial institutions will feel comfortable regarding outcomes, but the U.S Federal Reserve is expected to sound more neutral in the coming days.
Lows being tested now in the short-term could turn volatility as traders await the rhetoric of Tuesday’s parade of U.S Fed officials who will be talking at various events. While equities and U.S bond yields are being watched and having an effect on Forex, if Fed officials tomorrow sound less aggressive regarding monetary policy this could spark more selling of the USD. The question is if the currency pair breaks support, where is the next legitimate target?
USD/MXN and the 17.00000 Ratio as a Goal
Traders should remain realistic regarding targets. Speculators without a large amount of money in their accounts need to use conservative leverage and nearby price goals. If the USD/MXN continues to trade lower the obvious target will be the 17.00000 level, but this could prove too far away for day traders. The last time the 17.00000 ratio was challenged was on the 20th of September. The USD/MXN last sustained trading below the 17.00000 mark from the 23rd of August until the beginning of September.
- Take profit and stop loss orders in the USD/MXN should be conservative.
- The use of risk management will be important for traders who are tempted to look for more downside from the currency pair.
- Support levels have proven difficult to penetrate below the 17.00000 over the mid-term. Speculators need to be careful if they want to pursue lower depths.
USD/MXN Short Term Outlook:
Current Resistance: 17.09400
Current Support: 17.06010
High Target: 17.13600
Low Target: 17.01500
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