The USD/MXN has climbed in recent trading, mirroring the broad Forex market as investment houses consider their next moves and speculators worry about clarity.
Choppy bullish conditions have been displayed in the USD/MXN the past few days as the currency pair essentially has mirrored conditions across the Forex spectrum. The weakness of the USD seen against most other major currencies the past few weeks has begun to seemingly run out of power and resistance levels have been challenged.
As of this morning the USD/MXN is near the 19.56200 ratio with fast results active. Traders may be playing a ‘waiting game’ as they impatiently anticipate coming U.S economic data this Wednesday.
Bearish Momentum has Temporarily Halted in USD/MXN but will another Reversal Ignite?
The move higher in the USD/MXN is a healthy sign of market action, but for speculators who were betting on one way tickets downward the results have likely not been pleasant. The USD has rebounded the past several days after a few weeks of relative weakness. It is all part of the Forex ‘game’ and the USD/MXN has experienced choppy conditions.
The recent ability of the USD/MXN to challenge the 19.30000 level and below in the second week of November, came on the heels of whispers the U.S Federal Reserve would become more dovish regarding its interest rate policy. Nervous market conditions remain and some financial houses are likely not selling the USD aggressively the past week as they wait for more clarity. The U.S Fed has kept quiet regarding its intentions so far.
Important U.S Data and Thanksgiving Holiday will Affect USD/MXN Trading
Tomorrow important U.S data will come from the manufacturing and services sectors, the results will impact behavioral sentiment. The problem is that the Thanksgiving holiday in the U.S is starting on Thursday and the reaction to this data may be muted or not really come into force until early next week.
- If the USD/MXN is able to break above the 19.57000 level this could be a bullish indication for the short-term. The USD/MXN did climb to 19.59190 yesterday before stumbling lower.
- Short-term conditions are likely to be volatile as large financial institutions position before the holiday weekend in the U.S which will cause very light trading conditions.
- Wednesday’s U.S data will play a role in trading in the near-term, because the results will affect investor outlook regarding the U.S Federal Reserve and create volatility for the USD/MXN.
Traders may want to be rather cautious in the near term and if they insist on pursuing positions they are encouraged to watch technical conditions closely. Quick-hitting trades that attempt to capture momentum as resistance levels and support levels are challenged may be the best betting mindset in the short-term, but that is a difficult task. Results the next few days may include sudden and unexpected reversals due to light trading developing.
USD/MXN Short-Term Outlook:
Current Resistance: 19.56900
Current Support: 19.52100
High Target: 19.60200
Low Target: 19.47500
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