Early last week the USD/MXN stubbornly held onto values slightly above the 18.00000 level as it traded near 18.09000 and 18.07000 and held this ground well into Wednesday. Having produced a lower incremental trend the week before, it became clear the USD/MXN was holding onto values in a consolidated manner until more clarity was delivered by the U.S. Federal Reserve.
Upon the Fed’s FOMC Statement on Wednesday, the USD/MXN began to slide lower and the currency pair was near the 17.77500 late in the day. As Thursday began the USD/MXN saw more selling action and as the day concluded the 17.51000 level was being challenged. The lack of an increase to the Federal Funds Rate by the U.S central bank and belief within financial institutions that the Fed will not raise rates again in an aggressive manner helped the bearish move sustain.
Another Round of Selling on Friday via U.S Jobs Numbers
Then on Friday of last week, the U.S Non-Farm Employment Change and Average Hourly Earnings reports were published. Both important data points came in weaker than expected, there was less hiring, and the inflation of wages was not as strong as thought. The USD/MXN again stumbled rapidly and suddenly the 17.30000 mark was being challenged. After this low was achieved however the USD/MXN did begin to reverse upwards and showed some volatility, but the currency pair did go into the weekend near the 17.46100 mark.
Early trading this Morning and the USD/MXN is Consolidated
In early price action this morning the USD/MXN has traded in a rather tight realm and is now near the 17.44350 ratio with typical fast changes to values being demonstrated. Traders who chased the downward selloff last week are likely pleased with their results, and because of the price velocity seen are likely acknowledging the thought that the momentum lower will not be as quick today. Traders should be prepared for rather choppy conditions, but if resistance levels near the 17.46000 to 17.49000 ratios hold, this could be intriguing for speculators who believe a more bearish trajectory will be seen.
- Risk appetite in the global markets has shown some signs of life in the past few days, but speculators should monitor developing news to make sure calm remains. There will be a lack of important economic data today and tomorrow from the U.S.
- The 17.40000 level as support will be important psychologically for traders perhaps today and tomorrow, if this ratio proves vulnerable it would be a sign that financial institutions remain sellers in the near term and their outlook may be bearish for the USD/MXN.
USD/MXN Short Term Outlook:
Current Resistance: 17.46400
Current Support: 17.41500
High Target: 17.51900
Low Target: 17.35290
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