The USD/MXN is near the 16.98225 ratio as of this writing and is bouncing up against important mid-term support levels which have caused plenty of reversals higher the past handful of months. However, as financial institutions seemingly brace for a weaker USD outlook in the mid-term, the USD/MXN’s ability to challenge the current lower price levels should not be a shock.
Top Regulated Brokers
Speculators who want to trade the USD/MXN need to understand light holiday Forex volumes are going to affect the marketplace today and the remainder of this week. Traders tempted to continue to test lower momentum in the USD/MXN should understand that today’s conditions could produce surprises because of unbalanced orders and cause technical surprises.
USD/MXN 17.00000 Level Again a Factor to Consider
U.S economic data last week backed up the Federal Reserve’s rather soft rhetoric which was heard in the middle of December. Inflation and growth numbers from the U.S. came in weaker than anticipated. The USD/MXN began to break through important support on Thursday and when prices were sustained under the 17.10000 mark as the day progressed, selling pressure continued to mount and the 17.00000 ratio was challenged and penetrated on Friday.
The last time the USD/MXN had been able to significantly challenge and trade below the 17.00000 level was in the third week of September. However, the last time the USD/MXN traded below this important psychological juncture in a sustained manner was from the middle of July into late August of this year. The emergence of a weaker USD outlook has helped the USD/MXN certainly move lower again, and now financial institutions may feel the values seen this summer could be tested again.
USD/MXN Holiday Trading and Quiet Conditions
The USD/MXN downward momentum mirrors the broad Forex market rather well as many other major currencies have added value against a weaker USD. Support ratios which have been difficult for the USD/MXN to penetrate lower, may now get more consideration from financial institutions moving forward regarding the potential for additional lower values. However, traders wagering in the USD/MXN in the short and near term need to be careful because of the light holiday volumes.
- The incremental movement lower within the USD/MXN may look tempting, but traders should not get overly ambitious in the near term and the use of take-profit orders to cash out winning bets is advised.
- Choppy conditions could be seen in the USD/MXN over the near term due to the likely absence of large financial institutions this week.
- Bearish sentiment may remain observed, but traders of the USD/MXN need to guard against the potential of sudden reversals higher in the near term.
USD/MXN Short Term Outlook:
Current Resistance: 17.01030
Current Support: 16.97490
High Target: 17.05610
Low Target: 16.91870
Ready to trade our Forex daily forecast? We’ve shortlisted the best currency trading platforms in the industry for you.