Speculators participating in the USD/MXN last Thursday and Friday were treated (or terrorized) by sudden price velocity which created an elevator ride upwards on Thursday followed by a swift decline on Friday. Having started last week near the 17.55970 vicinity, and having experienced a low on Tuesday around the 17.44530 ratio, the USD/MXN then began to edge higher. But after sinking towards a depth of 17.47300 momentarily on Thursday, the currency pair suddenly burst higher and by Friday the USD/MXN hit the 17.93940 mark.
After running upwards quickly on Thursday and Friday of last week, the USD/MXN then began to trade lower and touched the 17.60000 area before going into the weekend. Traders who survived last week’s whipsaw circumstances will certainly want more tranquil trading conditions in the near-term. However, today and into Wednesday the USD/MXN may continue to produce choppy conditions for traders and risk management will be essential.
Risk Sentiment Battling for Equilibrium as Nervousness Remains Strong
Global risk-averse conditions remain problematic, but there have been signs of risk appetite creeping into the broad markets. The mixed sentiment is certainly having an effect on the USD/MXN results and is a reason for the rather strong rollercoaster-like price range late last week. U.S data will be crucial tomorrow and Wednesday via the Consumer Price Index Tuesday to be followed by Retail Sales figures the next day.
U.S Treasury yields remain problematically high and if tomorrow’s inflation numbers via the CPI results are stronger than expected, this could cause another round of risk-adverse momentum to be seen in Forex and the USD/MXN. Short-term resistance levels for the USD/MXN will be watched around the 17.71000 to 17.74000 levels.
Desire for a Steady Range as Support and Resistance Levels are Suspicious
Because of the rather fast market action in the USD/MXN late last week, speculators would certainly like to see more tranquil results today and tomorrow. If resistance proves durable in the coming hours, this might create the notion that an additional downside may develop. However, looking for an overly ambitious selloff before tomorrow’s CPI numbers from the U.S. may be unrealistic. Traders looking for the potential of downside should use quick hitting targets near support levels within the 17.66000 to 17.62000 ratios if they are conservative.
- Thursday and Friday’s volatility was noteworthy, but the USD/MXN did not venture too close to the 18.00000 mark. The lack of a move above this level may be perceived by bearish traders as a solid sign.
- However, the wide range seen late last week should also serve as a warning to USD/MXN speculators in the near-term that volatile conditions may reemerge this Tuesday and Wednesday.
USD/MXN Short Term Outlook:
Current Resistance: 17.71320
Current Support: 17.67800
High Target: 17.76770
Low Target: 17.61090
Ready to trade our Forex daily forecast? We’ve shortlisted the best currency trading platforms in the industry for you.