The past five days of trading for the USD/MXN have delivered choppy waters for speculators, but its bearish trend remains intact as weakness via the US Dollar continues to be expressed in many major forex pairs. Before going into the weekend the Mexican Peso saw a reversal higher as investors perhaps sought some safe havens as Friday drew to a close. However, upon opening yesterday the USD/MXN resumed its bearish trend.
Important support for the USD/MXN lurks near the 21.90000 level and if this juncture proves vulnerable speculators may target the 21.80000 to 21.70000 marks while using stop losses above. The current values of the USD/MXN are low water marks in July. Trading has been choppy and reversals often take place within the USD/MXN, which frequently test resistance levels and can cause emotions to be tense for traders if they are on the wrong side of the trade.
However, it should be noted as recently as the first week in June the USD/MXN did trade within a range of 21.20000 to 21.90000. Bullish trading then surged until late in June, when the USD/MXN began to see incremental selling start to take hold. Risk appetite remains an important part of the trading puzzle for the USD/MXN and as coronavirus statistics became noteworthy in Mexico in June and infection rates soared, negative headlines certainly played a part in the bullish trend which caused the USD to be bought against the Mexican Peso.
Mexico still faces challenges with coronavirus and its economic impact is hard to quantify regarding outlooks. However, the current trend of the USD/MXN has been bearish and resistance levels of 22.20000 look like they may be capable short term. Early calls from the Futures markets for equities in the US suggest slight gains will be made. Mexican equities have turned in mixed results the past month.
The weakness of the US Dollar cannot be overlooked regarding its role via the bearish trend for the USD/MXN. While speculators may not believe too much in the Mexican Peso as a potentially strong currency, trading sentiment suggests selling of the USD/MXN may remain an opportunistic avenue to pursue.
Mexican Peso Short Term Outlook:
Current Resistance: 22.20000
Current Support: 21.90000
High Target: 22.60000
Low Target: 21.70000
