The Mexican Peso has trended stronger against the US Dollar the past two months and short-term indications look favorable too.
The recent strength in the Mexican Peso mirrors the results of most currencies against the US Dollar as the global economy seemingly tries to recover from the Coronavirus epidemic. The Mexican Peso lost plenty of value beginning in March and its weakness peaked in April. Since then the Mexican Peso has crept back to stronger levels of support, but it is still weaker by a wide margin compared to its long term trading range.
However, short term trading technical charts indicate the USD/MXN may continue to see more strength develop for the Mexican Peso. The 21.5300 mark appears to be an important juncture for the USD/MXN short term. Short term traders who believe support will continue to be tested may have their sights on the 21.5100 region as a target if the Mexican Peso gets stronger versus the US Dollar.
Resistance at the 21.5600 level has been tested and seemingly held short term and this may give speculators who have a desire to sell the US Dollar against the Mexican Peso added ammunition when making a decision. If resistance above continues to prove durable, and it just might, an opportunity to take advantage of overall trend may stay intact. The question traders will certainly be asking themselves is if the MXN can continue to retrace its strength and find stronger values against the US Dollar not seen since March.
Current support levels for the USD/MXN have proven vulnerable the past month, this as the Mexican Peso has recovered value and broken through consistently. Traders may be tempted to look for reversals and signs of weakness and believe resistance levels need to be explored, but this would be going against the overall trend. The Mexican Peso looks to have a solid amount of resistance at the 22.0000 value. If traders are going to venture a buying position of the US Dollar this may be the top of the range short term range.
The forex market has seen most global currencies gain in value against the US Dollar as sentiment improves for emerging and developing markets. The Mexican Peso is not immune to the struggle of the global economy and its direction. The current short term mood in forex seems to indicate there is reason to believe the stronger trend for currencies like the Mexican Peso will remain intact.
Mexican Peso Short Term Outlook:
Current Resistance: 21.5600
Current Support: 21.5200
High Target: 22.0000
Low Target: 21.0000
