The past five days of trading for the USD/MXN has seen the pair sustain its higher short term values and surge on additional firepower.
The USD/MXN has likely crushed short term speculators who have been trying to sell the forex pair. The past five days of trading have seen support levels prove adequate early last week, and then witness a sincere drive upwards since the 4th of March which has obliterated resistance ratios. The USD/MXN is challenging mid-term high water marks not seen since early November 2020.
The USD/MXN has seen a brutal bullish reaction which has been demonstrated within many forex pairs as institutional investors have begun reacting to the stimulus legislation approved by the US Congress late last week. After achieving a long term bearish track many speculators have grown accustomed to chasing the downside momentum. Unfortunately the past week and half of trading, the pursuit of selling positions of the USD/MXN has likely been ineffective.
The results from the past five days of trading emphasize the need for carefully chosen risk management tactics which use limit orders and stop loss mechanisms. The reaction via strong buying in the USD/MXN the past few days may actually look attractive to traders with bearish sentiment if they still have cash in their accounts to speculate. If a trader has the courage to step in front of the short term trend and speculate on the ability of the USD/MXN to resume a bearish track this could prove worthwhile, but it also could prove sincerely dangerous.
Current resistance levels near the 21.55000 to 21.65000 ratios do look tantalizing via a long term chart. If the current resistance levels do not hold this does indicate a further climb to September 2020 highs could be anticipated. High water marks in September did reach the 22.45000 level, meaning there is still room from a rather lengthy mid-term technical viewpoint for the USD/MXN to climb on its short term bullish momentum if the trend does not relent.
However, speculators with some patience and a dose of courage may not believe the USD/MXN has the ability to continue its short term bullish rise much longer. If a trader has the intention of being a seller and going against the near term trend, they should definitely use stop loss ratios which protect their accounts against powerful currents which are affecting forex.
Selling the USD/MXN on sustained trading below the current resistance levels may prove to be a potentially good wager. However, based on the past week of trading speculators who continue to pursue bearish moves should know they are swimming against strong short term tides.
Mexican Peso Short Term Outlook:
Current Resistance: 21.65000
Current Support: 21.40000
High Target: 21.88000
Low Target: 21.15000