The USD/MXN remains near important long-term lows, but the last week of trading has produced choppiness and concern about support levels.
The USD/MXN is near the 18.80300 ratios as of this writing, which demonstrates the currency pair’s ability to traverse within sight of long-term lows. However, the past week of trading has produced choppy conditions for day traders who are trying to pursue the USD/MXN via short-term wagers. A low of nearly 18.56000 was seen last Wednesday, but a reversal higher took the USD/MXN to about the 19.10000 mark the following day.
The USD/MXN remains within clear sight of values traded in the beginning of 2020 and this is a reason speculators may be attracted to the notion of more downside developing in the currency pair. However, the reversal of the lower depth attained last week should serve as a warning sign that trading Forex is never a one-way street. The bearish trend of the USD/MXN has been rather reliant, but it has also exhibited strong moves higher on occasion which can prove costly to sellers who are over-leveraged.
Important U.S Data Coming on Thursday will affect the USD/MXN
GDP statistics coming from the U.S. tomorrow will certainly cause some near-term volatility for the USD/MXN. However, the question after seeing a long and durable bearish trend in the USD/MXN is if the Forex pair will now try to create a new price range which is between the 18.60000 and 18.90000 ratios. The impetus for more volatility will certainly come via the monetary policy outlook of the U.S Federal Reserve, but technically the USD/MXN would have to break below early 2020 prices to build additional momentum lower.
- Speculators should be cautious in the near term regarding the USD/MXN. Wagering via technical support and resistance levels being demonstrated without the expectation the currency pair is suddenly going to challenge the 18.50000 to 18.40000 ratios may be wise.
- Having attained a significant bearish trend the USD/MXN may now create equilibrium within its current short-term price range. The move above the 19.00000 last week could signify some financial houses feel the USD/MXN has been oversold in the meantime.
USD/MXN Short-Term Conditions need Narrow Price Targets from Speculators
The USD/MXN should be monitored closely and its current short-term price range treated conservatively. Traders who have gotten used to the downward price action from the USD/MXN should remain realistic regarding their short-term targets.
Looking for large moves downward may be tempting, but prove dangerous. Tomorrow’s U.S. Gross Domestic Product numbers will affect the USD/MXN. Perhaps selling the USD/MXN after it explores a slightly higher value will become an intriguing short-term wager, but take-profit orders should be used to cash out profits if they are produced swiftly.
USD/MXN Short-Term Outlook:
Current Resistance: 18.85000
Current Support: 18.74600
High Target: 18.98100
Low Target: 18.58000