The Mexican Peso had been enjoying a strong bearish trend until the 17th of September. The USD/MXN was challenging support levels not tested since early March. Optimists might have believed the forex pair was sincerely going to find itself back within a pre-coronavirus price range up until late last week. Things have changed the past five days of trading, and the USD/MXN has suddenly started to burst through resistance with easy surges upward.
Global risk appetite has tumbled and this has caused a bullish trend to emerge in the USD/MXN. Resistance near the 22.58000 level looks vulnerable and if it is broken higher the next target for speculators could be the 22.93000 mark which was last tested in early July.
Speculators will have to determine their short term trading stance and understand it may not mesh with their mid-term and long term outlooks. The benefit of being a short term trader is the distinct advantage and mindset that technical trends often happen quickly. Being proactive as a short term trader allows you to find opportunities when others might not be willing to speculate.
Near term it appears that nervousness will continue to languish within the global markets. If equity indices continue to struggle forex traders will certainly be able to use this as a barometer as they measure trading sentiment. Speculators may anticipate further tests of resistance will emerge for the USD/MXN if negative behavior is expressed on global stock exchanges.
Buying the USD/MXN near the 22.37000 to the 22.30000 prices levels with limit orders may be a way to take advantage of temporary reversals downward. Plenty of traders may anticipate the USD/MXN may see its recent bearish trend reignite, but for a sustained bearish movement to occur global indices will likely have to prove capable of producing a couple of winning days in a row, meaning choppy trading conditions will likely prevail within the forex pair short term.
Traders may be able to take advantage of slight pullbacks which look like they may test support levels in order to pursue buying positions of the USD/MXN. The mid-term bearish trend of the USD/MXN may still have plenty of life, but the next couple of days could continue to prove bullish momentum still has room to flourish for the USD/MXN.
Mexican Peso Short Term Outlook:
Current Resistance: 22.58000
Current Support: 22.22000
High Target: 22.93000
Low Target: 22.03000
