The USD/MXN is trading near short-term highs in early trading this morning. The past few days of trading have seen a counter move within the Forex pair after the Mexican peso began to challenge important values below against the USD. Yesterday, a high of nearly 20.26000 was tested, but some bearish action did prove it had enough ammunition to cause a small movement lower afterwards.
As of this writing, the USD/MXN is near the 20.16000 vicinity and speculators should pay close attention. The past few months of trading within the USD/MXN has demonstrated a strong bearish trend, and early last week, the Forex pair began challenging values not sincerely traded since early March of this year. The reversal upwards, which began to strike late last week, may have been a natural reaction to the barrage of downward momentum which has been displayed.
Trading is never a one-way street; if it were, all speculators would be rich and no one would walk away unhappy with their results. Unfortunately, trading is packed with positions which sometimes go against perceptions, and that’s why risk management is important. Living to trade another day and creating a better percentage of winning trades versus losing trades is a solid practice.
If today’s early price action within the USD/MXN continues to demonstrate a durable value and incrementally moves downwards, another challenge of prices below seems like the logical technical perspective. Short-term support near 20.09000 should be watched intently; if this level proves vulnerable, another attack on the 20.00000 could rapidly ensue.
Selling the USD/MXN on slight reversals upwards may prove to be a solid decision today. The USD/MXN is affected by risk appetite and is a solid barometer of overall market conditions. Trading the past month has had displays of optimism and perhaps over-exuberance, but cautious trading has also been abundant and there have been very few displays of violent trading in the USD/MXN.
Current resistance near the 20.24500 level could prove adequate as a stop loss for traders. Short-term traders will need to be patient, but if global risk appetite proves to have strength, the USD/MXN may find it is capable of challenging lower values tested recently and has enough momentum to sustain its strong mid-term bearish momentum.
Mexican Peso Short-Term Outlook:
- Current Resistance: 20.24500
- Current Support: 20.09000
- High Target: 20.31000
- Low Target: 19.96000
