The USD/MXN is trading near the 17.57000 value of this morning with its typical fast-paced results being demonstrated. In many respects, the USD/MXN is starting this week of trading near the same values it began last week’s trading. The lower realms of the currency pair’s range are certainly still within plain sight. On Friday at one point, the USD/MXN fell to a low of around 17.42000 momentarily before producing a reversal higher.
The lower values tested on Friday came within sight of prices seen in the middle of May slightly above the 17.40000 ratio, before a move higher nearly touched the 18.00000 mark on the 23rd of May. The USD/MXN remains almost locked into a lower price range it has not traversed since July 2017, and if the 17.40000 were to be penetrated lower the currency pair would be in territory it has not sustained since the spring of 2016.
Test of Lows in USD/MXN Touching Important Support
Last week two U.S. Federal Reserve officials spoke about their belief the U.S. central bank should not increase their interest rates in June. However, this past Friday the U.S. published stronger-than-expected jobs numbers which puts the Federal Reserve in a difficult position as it tries to battle inflation that remains unforgiving and stubborn.
The Fed is likely to have a rather loud debate between its members before its interest rate decision on the 14th of June. Price action in the USD/MXN has perhaps reflected the nervous behavioral sentiment regarding the Federal Reserve, but its long-term bearish trend has other factors too. The improved price of Crude Oil for the past two years has helped the Mexican Peso become stronger is one example, because Mexico is a large energy producer.
Support near 17.50000 Remains Significant for the USD/MXN
- The near term is likely to remain choppy until clarity comes via the Federal Reserve’s rate decision next week.
- The 17.50000 ratio looks to be important psychological support for the USD/MXN.
- A sustained move below the 17.50000 would be significant if value beneath the level could be held for a full day of trading.
Traders should not get overly ambitious with the USD/MXN in the short term. The recent results of the currency pair have been rather polite, but its range between 17.50000 and 17.60000 has been attractive since Thursday of last week. Traders who insist on looking for downward momentum in the USD/MXN should remain cautious in the near term and consider using speculative selling positions when the resistance above is being tested, this while looking for quick-hitting moves lower using take-profit orders.
USD/MXN Short-Term Outlook:
Current Resistance: 17.60010
Current Support: 17.52900
High Target: 17.66150
Low Target: 17.64600
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