The USD/MXN has produced a steady diet of bearish activity the past week-and-a-half. Bearish speculators have certainly witnessed a strong amount of selling momentum as the Mexican peso has once again positioned itself within the lower realms of its long-term price band against the USD. As of this writing, the USD/MXN is near the 19.83000 mark and the 20.00000 juncture looks like it is light years away.
However, the volatility produced in the USD/MXN the past month of trading should make all traders uncomfortable. Not only was the 20.00000 breached higher, but the USD/MXN attained a rather lofty value of nearly 20.70000 only two weeks ago. The ability of the Mexican peso to resume its bearish characteristics which it has steadily produced – along with choppy conditions – cannot be dismissed, but the trajectory has not been easily achieved.
Important support for the current price range the USD/MXN is trading has proven tough to penetrate. The 19.65000 mark has been rather durable support, but in January of this year, the USD/MXN did trade near the 19.50000 juncture. However, the ability to penetrate beneath the current price range the USD/MXN is now trading in has proven hard to achieve. Technical traders may be inclined to say that a reversal higher is likely, but is that correct?
Speculators need to look at long-term charts. They will immediately notice that slightly below the current price levels of the USD/MXN, an immense amount of solid reversals has taken place. So is this time different? If support near the 19.70000 to 19.55000 comes into focus this should certainly set off alarm bells for technical traders. The last time the USD/MXN traded below the 19.50000 levels with any strength was in February of 2020.
Traders should be cautious within the current price range of the USD/MXN. However, aggressive traders may want to continue to pursue downside momentum, although it is advised that they do not become too greedy. Selling the USD/MXN on slight reversals higher and capturing profits with targeted take-profit ratios below may be able to produce profits. Take profit orders will likely prove essential in the short term. Traders should expect choppy conditions, but if the USD/MXN suddenly proves current support levels are vulnerable it could be worthwhile to keep bearish sentiment intact.
Mexican Peso Short-Term Outlook:
Current Resistance: 19.91000
Current Support: 19.77000
High Target: 20.01000
Low Target: 19.69000
