The USD/MXN has displayed a rather choppy trading range the past few days and support levels were certainly tested. However, what should get the attention of speculators is the notion that the Forex pair continued to mount an attack on critical support levels. Trading towards the end of last week did not experience huge volumes because of the lack of American institutional participation, and this opens the door to the possibility that more tests of support will play out in the days to come.
Yes, there is always a test of support levels underway, but the 20.00000 mark remains an important juncture for the USD/MXN. Late last week, the Forex pair did show the ability to trade below the 20.00000 mark, but it was not sustained. As trading has begun today, the USD/MXN is hovering above the key psychological level. When trading from the Americas starts in a few hours, it will prove important to watch how direction develops. But speculators should be aware that the first trends that begin to be demonstrated on their computer screens may be vulnerable to sudden reactions and counterattacks.
Trading from US financial institutions will certainly be heavier than it was late last week, but it sometimes takes a day or two after the long Thanksgiving weekend for trading to resume to normal levels. This is because many folks need to finish off their travels and then look over the marketplace for a moment before they start to take actions in the marketplace after returning from the holiday.
However, the USD/MXN has enjoyed a solid bearish trend and the ability of the Forex pair to maintain a magnetic like closeness to the 20.00000 will attract financial institutions and speculators. Taking into consideration the amount of current global risk appetite, traders may be tempted to continue pursuing bearish momentum. After bouncing off support near the 19.95000 level late last week, speculators should watch this value carefully.
If the USD/MXN drops below the 20.00000 level and breaks through the 19.95000 juncture, it could set off a volatile dash of trading as volumes increase. The USD/MXN remains an important barometer of risk appetite and, if investors return from their long holiday with an optimistic approach, the Forex pair may continue to try and break through existing support levels near term and free itself from its choppy consolidated path.
Mexican Peso Short-Term Outlook:
- Current Resistance: 20.15000
- Current Support: 19.93000
- High Target: 20.19000
- Low Target: 19.66000
