The past day of trading for the USD/MXN has produced a fairly solid range of 22.6400 to 22.8700 for the currency pair. This consolidated range may provide speculators with an opportunity to test their perception of the forex market.
While US Futures for the equity indices has suddenly begun to show a slight decline today, increased risk appetite in the Asian markets continued to be displayed. And it should be noted that opening calls for US equity indices the past week have seldom looked optimistic, but their results at the end of the day have been satisfactory for investors who continue to seek higher values in stocks.
The Mexican Peso is a sensitive currency and it frequently mirrors developing risk sentiment in a quick manner. The Mexican government has been keen to show it has a solid partnership with the US. Yesterday’s summit between Mexico’s President Lopez Obrador and US leader Donald Trump took some by surprise, but both politicians are keen to show they have international support. Mexico’s economy is suffering and recent statistical data doesn’t create a rosy picture. However, the USD/MXN forex pair has been relatively calm.
The Mexican Peso is still trading within the weaker breath of its long term values. The MXN/USD traded within a value range of 18.5000 and 19.0000 in a dominant fashion before facing distress because of concerns that arose because of coronavirus. Statistically, Mexico appears to be suffering from a rapid rise in infections and a mounting death toll. However, it is not alone in its battle and while economic challenges mount, the nation still has an important presence within global trade.
If a speculator believes global risk appetite will remain calm or improve, they may be inclined to test trading conditions within the USD/MXN with short term selling positions. The recent consolidation within the forex pair allows adequate maneuvering for stop-loss positions with fairly close resistance within sight.
The 22.9000 price level up above for the USD/MXN looks like a proper place for traders to suspect reversals lower will occur. So if a trader is willing to put a stop loss near the 22.9500 mark this may provide enough space to allow for volatility while seeking support levels below.
Mexican Peso Short Term Outlook:
Current Resistance: 22.9000
Current Support: 22.5000
High Target: 23.1000
Low Target: 22.4000
