USD/MXN: Psychological Inflection Target Remains a Magnate

Robert Petrucci

The USD/MXN remains locked within near the price vicinity of 20.0000, but the Forex pair has also produced a short-term bearish trend

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The USD/MXN is traversing near the key inflection point of 20.0000, but intriguingly, the Forex pair has also produced an incremental bearish trend since late January. The USD/MXN has delivered occasional volatility too, which makes it an attractive speculative wager. After hitting support near 19.50000 on the 21st of January, the USD/MXN reversed higher and came within the 20.60000 juncture on the 28th of January.

Speculators should note that the lower values reached on the 21st of January tested prices not seen since early March of 2020. The re-establishment of a bearish trend the past two weeks of trading after suffering the reversal higher off the lower value sets the table for traders to contemplate potential direction via technical charts. The 20.00000 juncture remains a key element in trading for the USD/MXN, if this level can see sustained trading below this price, the Forex pair may begin to see it bearish momentum accelerate.

Support at 19.92000 is important and, if this juncture is proven vulnerable, it will set up a vital test for the USD/MXN near 19.85000. If the 19.85000 mark is challenged and broken lower, it could signal a retest of January lows.

Mexico has economic concerns because of the impact of coronavirus, but global risk appetite remains strong and the rather weak stance of the USD in Forex against many currencies, including the Mexican peso, has been demonstrated. The long-term bearish trend of the USD/MXN faced a challenge in late January, but as the Forex pair trades below the 20.00000 mark, traders are likely considering the potential for more downside action.

Traders may want to see if the USD/MXN is able to sustain its current price, but speculators may be tempted to sell on small reversals higher and use values slightly above the 20.00000 as a stop loss ratio. The USD/MXN may have the potential to retest lower values seen in January, but sellers should not get greedy and acknowledge that the 19.85000 juncture may prove a volatile battleground if it is tested.

The long-term bearish trend of the USD/MXN remains evident, and short-term conditions have set the stage for more potential downside movement. Short-term selling positions appear to be the logical speculative choice while using solid risk management.

Mexican Peso Short-Term Outlook:

Current Resistance: 20.05000

Current Support: 19.92000

High Target: 20.11000

Low Target: 19.85000

USD/MXN chart

Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.

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