Risk appetite is an important part of the USD/MXN forex pair. The past five trading days for the Mexican Peso have produced lower resistance levels and an ability to test vulnerable support which has emerged. In early trading today the USD/MXN has seen some buying action, but the value of the forex pair remains in a known range which will allow speculators the opportunity to gauge their risk sentiment.
Early future calls for the North American equity indices show the potential for slight declines, but Mexican stocks are displaying signs of more buying momentum. The question is how long this optimistic burst of buying will last in Mexico? Concerns remain heightened regarding coronavirus as deaths and infections statistically soar in the nation. Mexico announced new rules for beachgoers yesterday, but critics will point out the mandates for social distancing were too late and have caused havoc for the public’s safety and economically.
The support level of 22.25000 remains critical in the short term; if this juncture can be broken downwards and sustained the 22.15000 to 22.10000 levels will be targeted by speculators. The past month of trading for the USD/MXN has produced a range largely between 22.00000 and 23.20000. However, a substantial amount of the trading for the forex pair has also been between 22.20000 and 2.80000 and the past five trading days also display this value band.
Because the USD/MXN is trading near important support levels speculators may actually decide to consider a reversal that could be found. If a trader enters a buying position for the USD/MXN between values of 22.30000 and 22.40000 and has the patience for a short term bullish trend to emerge which will test resistance higher this could prove a worthwhile trade.
While the USD/MXN has produced a rather comfortable range the past month, sudden fluctuations remain part of its trading trademark. Speculators may suspect the Mexican Peso will lose value to the US Dollar as the known technical range persists. Buying the USD/MXN as it tests support levels appears to be the wise choice over the next two days. While optimism has shown risk appetite remains constant in the global markets, concerns about the Mexican economy and coronavirus may act as a countermeasure and keep the USD/MXN from breaking support levels which admittedly are nearby.
Mexican Peso Short Term Outlook:
Current Resistance: 22.77000
Current Support: 22.25000
High Target: 22.90000
Low Target: 22.20000
