USD/MXN: Short-Term Trend Intensifies as Bull Moves Gains

Robert Petrucci

The USD/MXN has developed a rather solid bullish trend the past week of trading after producing significant choppy results since the third week of June.

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The past week of trading has seen the USD/MXN trade near lows of 19.82000 on the 16th of July and highs of nearly 20.25000 demonstrated late last night. The move higher, which has developed the past week, has come after several weeks of rather choppy results, which saw important lows tested while support proved durable and created a steady flow of reversals. Speculators need to use limit orders in the USD/MXN to not only protect their price fill as they enter a position, but they also should use solid take profit and stop loss ratios to guard against swift changes in direction.

The high water mark reached late last night near 20.25000 is intriguing because it follows a week of rather steady bullish momentum. The value achieved tested ratios not seen since the 23rd of June, but the last time those higher prices were experienced was as the USD/MXN receded from highs which were attained on the 18th of June when the Forex pair tested the 20.74000 mark. These highest levels developed in the wake of nervous sentiment generated by the U.S Federal Reserve.

The USD/MXN has steadily tested bearish sentiment the past year of trading and its long-term trend certainly can be perceived as downward. But the past six months of trading have also produced a rather interesting pattern: after lower support levels between the 19.80000 to 19.65000 have been tested, violent higher reversals have occurred and the USD/MXN has been able to produce rather quick trends upwards.

Speculators need to decide if the current short-term trend upwards can continue. Technically, it appears that there may be some further momentum to be found by bullish traders. As of this writing, the USD/MXN is trading near the 20.12000 mark, which makes the junctures of 20.10000 and 20.20000 focal points. If the 20.10000 level falters and support proves vulnerable, the 20.07000 to 20.03000 marks could be tested quickly with downside action. If the 20.20000 level is breeched higher and prices start to sustain above this mark another test of 20.25000 is quite reasonable.

Choppy results have been common in the USD/MXN the past few weeks and speculators should expect them to develop again. The past week of trading with a steady bullish cycle is likely to erode sooner rather than later.

Mexican Peso Short-Term Outlook:

Current Resistance: 20.21000

Current Support: 20.07000

High Target: 20.34000

Low Target: 19.92000

USD/MXN

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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