The USD/MXN has continued to move lower and is testing ratios near crucial support, and if the levels prove vulnerable this could add to bearish momentum.
The USD/MXN is near the 20.15000 ratio as of this morning as it hovers over important short term lows and close to significant mid-term prices. If the 20.12000 level is challenged today and proves vulnerable this could add to bearish sentiment which has taken hold of the USD/MXN since the 12th of October. A high of nearly 20.90000 was seen on that date, but since then an incremental downward trajectory has been demonstrated.
Speculators may believe the USD/MXN has been oversold recently taking into consideration the highs which the forex pair turned in less than two weeks ago. However, traders also need to contemplate that from late July until late September the USD/MXN also had a habit of occasionally trading near support levels of 19.85000. The past month and half has provided a wide range for the forex pair and the question for speculators is if the trend downwards will continue and try to once again break below the 20.00000 mark.
The price velocity within the USD/MXN has been rather strong, but resistance with a short term perspective can be identified near the 20.21000 to 20.28000 levels. If these ratios prove to be durable near term, this could set off another dose of selling within the USD/MXN. Traders may want to prepare for a solid amount of choppy conditions near term.
If the USD/MXN continues to languish within the 20.13000 to 20.15000 marks, speculators may grow confident they can wager on additional moves lower being exhibited. A break below the 20.10000 level could add to momentum if financial institutions begin to believe the 20.00000 is going to become a magnet once again for the forex pair. However traders should be prepared to use stop loss and take profit orders without being overly ambitious.
The the past ten days for the USD/MXN has produced bearish movement, but the forex pair is close enough to mid-term highs that any type of strong reversal upwards could make for nervous and choppy conditions short term. A speculative wager on additional downside price action being exhibited may prove to the right choice, but traders should have realistic targets which do not look for massive moves in the short term. Cashing out quick hitting winning positions may prove to be the best trading tactic today.
Mexican Peso Short Term Outlook:
Current Resistance: 20.21300
Current Support: 20.12200
High Target: 20.28000
Low Target: 20.00600