After touching higher values early this week the Mexican Peso lost some momentum, but importantly it has not shown an ability in the short term to punch through key technical resistance levels and the USD/MXN is still displaying selling pressure at critical moments.
The USD/MXN has always delivered fireworks for traders and a strong speculative nature is needed when attempting to trade this forex pair. The resistance level of 22.3000 now appears to be a big juncture for traders who are seeking further opportunities to put a short position on. However, entry levels near 22.25000 could be considered appropriate if you are looking to short the USD/MXN.
Support levels for the Mexican Peso appear vulnerable in the current market conditions. If the USD/MXN continues to battle lower another test of the 21.5000 level may develop sooner rather than later. Support levels do not appear strong near the 22.2000 value and short term traders may seek what they see as an opportunity for a profitable selling position of the USD/MXN.
Yes, the Mexican Peso reversed higher after hitting lows on the 8th of June, but the USD/MXN in fact delivered a nice selling opportunity. Traders need to keep in mind that resistance levels have held the past two days and the 22.3000 has proven capable of creating selling surges in the USD/MXN and this may remain the case. Traders seeking long positions, buying the USD/MXN, may see an opportunity to retest highs made by the US Dollar the past couple of days, but resistance around its current price levels has proven strong since late May.
The resistance levels which have steadily held the past few weeks of trading within the USD/MXN make it an attractive speculative selling opportunity for traders. Sentiment in the forex markets continues to demonstrate a weaker US Dollar perspective short term. Rhetoric from the Federal Reserve the past couple of days in which the US Central Bank has repeated that it will maintain a dovish policy and try to infuse capital into the markets will likely continue to create a belief the US Dollar should be weaker than it is currently valued. A selling position of the USD/MXN appears attractive short term for these reasons.
Mexican Peso Short Term Outlook:
Current Resistance: 22.3000
Current Support: 22.1000
High Target: 22.5000
Low Target: 21.5000
