The USD/MXN continues to embrace a higher price range, even after reversing slightly lower after hitting mid-term highs before going into the weekend.
The USD/MXN hit a mid-term high of nearly 20.73500 on Friday, which tested values last seen in June of this year. Even though a reversal occurred after hitting the highs before going into the weekend, the USD/MXN maintains its upper range and current trading conditions technically remain dynamic as speculators consider their chances within the volatile conditions.
On the 15th of September, the USD/MXN was trading near the 19.83000 level which has acted as a major support ratio for a long duration. Global market conditions in Forex have become fragile and the USD has gotten stronger across the board, and the USD/MXN has correlated well with other major pairs. Nervous sentiment continues to react to perceptions being generated by US economic policy led by the Federal Reserve and politicians, as financial institutions worry about the puppet masters behind the curtains in the States creating more problems than good.
Technically, support levels in the USD/MXN should be watched near the 20.40000 level, but this may prove to be a false flag and actual support may be stronger near the 20.38000 juncture. A low of around 20.40000 was tested early today. However, if the 20.38000 level is able to be sustained after additional volumes hit the market upon the arrival of trading from the US and Mexico later today, this could be an indicator that more bullish momentum will be generated.
The USD/MXN has a solid habit of producing solid trends and the recent move higher in the Forex pair is intriguing. Technically and fundamentally, the short term may continue to see further tests upwards. The high of 20.73000 which was hit on Friday and challenged long-term highs may cause speculators to believe that this juncture may see another test near term.
Cautious traders should not be overly ambitious if they are pursuing bullish positions, but going long orders do seem to have some merit if wagers are going to be made. Conservative traders should consider waiting for support levels to be approached to ignite their long positions while looking for moves higher. Resistance near the 20.54000 mark could prove important, and if this value is penetrated, fast conditions could develop again as speculators and perhaps financial houses anticipate a challenge to the 20.60000 juncture again.
Mexican Peso Short-Term Outlook
Current Resistance: 20.54000
Current Support: 20.38000
High Target: 20.64000
Low Target: 20.26000