USD/MXN: Support Levels Vulnerable as Bearish Momentum Grows

The USD/MXN is near important support levels and bearish momentum within the forex pair continues to be demonstrated.

The USD/MXN is hovering above crucial support and the 20.00000 juncture is clearly within target for bearish speculators who are pursuing selling positions.   The past five days have seen the USD/MXN be able to maintain downward sentiment and the important level of 20.10000 has now become a resistance juncture worthy of attention.

The USD/MXN has not traded below the 20.00000 juncture in earnest since the middle of February and traders may be clamoring for further bearish momentum to be demonstrated. With all signs pointing towards this crucial level and weaker sentiment within the USD starting to be exhibited within global forex again, it is seemingly an ‘obvious’ wager to sell the USD/MXN.

Experienced traders with scars from previous trading endeavors however, probably will laugh out loud upon reading the above sentence because of the word obvious being used.  A healthy dose of skepticism is a good characteristic when trading forex. Reversals are commonplace in trading and the USD/MXN has provided reversals higher when the 20.00000 has been challenged before. The question speculators need to ask if this is the time and place the USD/MXN will begin to reignite its long term bearish trend.

Traders who want to pursue selling positions can use nearby resistance as stop loss ratios. As of this writing the USD/MXN is hovering near the 20.03000 level, thus the 20.08000 to 20.11000 junctures might prove interesting as stop loss protection for traders who need to use close proximities. As for what short sellers should be targeting within the scope of bearish sentiment, this is a problematic consideration too.

Certainly the 20.00000 support level is within target, but traders may be tempted to look for action below this level short term.  Being overly greedy in trading often leads to costly mistakes and watching profits disappear. However, if a trader wants to sell the USD/MXN and target prices below the 20.00000 this may be the logical decision.

First the 20.00000 level if it is broken lower will need to sustain trading below this mark to prove bearish sentiment is intensifying. Second and crucial is that if the 20.00000 is broken, speculators should expect a healthy dose of volatility to emerge so they should definitely have their take-profit orders working and primed to capture profits if they material if the USD/MXN continues its bearish momentum.

Mexican Peso Short Term Outlook:

Current Resistance: 20.10100

Current Support: 20.01000

High Target: 20.13100

Low Target: 19.91000

USDMXN

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.