Heightened price velocity the past month has stirred the USD/MXN for speculators and the currency pair’s price action last week reflected the known volatile conditions. However, the USD/MXN at the same time has mirrored the broad Forex market. The highs tested on and off the past handful of weeks in the USD/MXN have likely tested the emotional fortitude of USD/MXN bearish traders.
After touching values on the 6th of Friday near the 18.49155 ratio, Monday’s highs in the USD/MXN on the 9th of October were slightly lower around the 19.41975 mark and may have been perceived as a signal the currency pair had been overbought. The remainder of last week saw the USD/MXN decline, but the break below the 18.0000 value on Tuesday has produced trading full of reversals. The current price of the USD/MXN as of this writing is near 18.93425 with typical quick price interactions. The USD/MXN has correlated to the broad Forex market with mixed results the past couple of days.
USD/MXN 18.00000 Key Level in Near-Term
If the USD/MXN can sustain trading below the 18.00000 in the near-term this may be an additional signal the currency pair is still perceived as having been overbought the past month of trading. Let’s remember the USD/MXN was trading near the 17.00000 level on the 20th of September.
The USD/MXN has been within a bearish mode over the long-term and its ability to trade higher the past month is a healthy sign of correlation, but could also prove to be attractive for speculators who believe lower values will be produced if the global financial markets begin to be more tranquil.
USD/MXN a Solid Barometer of Broad Market Action
Although the USD/MXN is not considered a globally significant currency pair like the EUR/USD, GBP/USD or USD/JPY, the results within the USD/MXN are a solid barometer of behavioral sentiment in the markets. U.S Treasuries have seen slight declines via their yields in the near-term, if this pattern continues the USD/MXN may have additional room to decline and begin to retest values being traded only a couple of weeks ago.
- Sellers of the USD/MXN should remain realistic regarding their targets below. Broad market conditions will need to remain calm for the USD/MXN to continue traversing downwards.
- Tomorrow’s Retail Sales numbers from the U.S could prove to be important. A slight decline is expected via the results regarding consumer spending.
- If tomorrow’s Retail Sales figures are weaker this could help propel the USD/MXN lower.
USD/MXN Short Term Outlook:
Current Resistance: 17.98100
Current Support: 17.92010
High Target: 18.05340
Low Target: 17.86290
Ready to trade our Forex daily forecast? We’ve shortlisted the best currency trading platforms in the industry for you.