USD/MXN: Aggressive Move Up as Resistance Proves Vulnerable

Robert Petrucci

The USD/MXN climbed to new highs going into the weekend, and the Forex pair in early trading today is sustaining its higher value range.

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As of this writing, the USD/MXN is near the 21.82000 level as the Forex pair awaits more trading volume to develop in the coming hours. Before going into the weekend, the USD/MXN traded near highs of 22.16000 as fears regarding the outbreak of the new coronavirus variant Omicron began to make headlines. The USD has been stronger against many of the major currencies. However, in addition to the Omicron news is the fact that the USD/MXN has also been experiencing a bullish move higher since early in the second week of November.

On the 9th of November, the USD/MXN was trading near the 20.25000 level. The ability of the USD/MXN to traverse over the 22.00000 last Friday may have proven a profitable ‘windfall’ for traders who were lucky enough to have been pursuing buying positions. After reaching the high water marks on Friday, the USD/MXN did reverse lower falling to the 21.65000 vicinity. This low, however, remained above the highs experienced in the USD/MXN on the 24th and 25th of November.

There is a substantial amount of worry within Forex affecting trading conditions, speculators should practice caution and use their risk-taking tactics with exceptional care. Current support for the USD/MXN appears to be the 21.69000 mark, and below that the 21.61000 level appears to be rather adequate. However, these support levels are rather speculative distances away from the current market price. From a risk-reward viewpoint, a trader using a very conservative amount of leverage who is looking for higher values in the USD/MXN may believe those are safe stop loss protection ratios.

Fast conditions may develop today again in the USD/MXN particularly as North American traders enter the market with institutional orders. The notion the USD/MXN has been within a bullish mode, experienced new highs late last week on news regarding Omicron and has sustained its relatively high price realm may be a signal the Forex pair is not about to reverse lower violently quite yet.

Speculators who want to be buyers today cannot be blamed, but perhaps it will prove worthwhile to wait for slight reversals lower to ignite long positions. Traders may want to practice quick trading techniques today and use working take profit orders to capture volatility, which may be sparked with potentially fast movements near term due to the rather nervous conditions which are expected.

Mexican Peso Short-Term Outlook

Current Resistance: 21.90000

Current Support: 21.69000

High Target: 22.17000

Low Target: 21.61000

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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