The USD/MXN currency pair is trading near intriguing lows as speculators contemplate what will occur next upon the return of financial institutions positioning in mass over the next two days. While lower holiday volumes certainly affected the USD/MXN, the ability of the currency pair to maintain its lower values will be looked at carefully by technical and fundamental traders. As of this writing the USD/MXN is near the 16.88300 ratio.
The beginning of trading last week following the New Year’s holiday had the USD/MXN around the 16.90000 ratio, but then incrementally stronger buying was seen much of last week. A high around the 17.10000 ratio was tested on Wednesday, but speculators should remember this happened with light trading conditions dominating. The higher realms of the USD/MXN continued to be tested as choppy trading continued and the currency pair was near the 17.04000 mark when the U.S jobs numbers were published on Friday.
USD/MXN Higher Near-term Price Realm Disappeared Quickly
The upwards price range of the USD/MXN however quickly vanished after the Non-Farm Employment Change and Average Hourly Earnings reports from the U.S were digested. It appears that as analysts understood even though the current month’s hiring was slightly stronger than anticipated, that previous months results had been significantly revised lower. Fear of a sudden reversal of more aggressive rhetoric from the U.S Federal Reserve quickly vanished, and the USD/MXN began to move lower swiftly. A low around the 18.86800 mark was touched before going into last weekend.
The ability of the USD/MXN to remain near its lows as trading has opened early this morning indicates that behavioral sentiment remains steady. As full volumes emerge today and tomorrow following the long holiday season, day traders should be braced for the potential of choppy conditions in the coming hours. However, if the USD/MXN holds its current value realms this will set the table for intriguing results the remainder of this week.
Late December Prices are in Sight for the USD/MXN
The current price level of the USD/MXN is testing values seen on the 28th of December; the return to these lower realms brings contemplation of late August 2023 prices. Early trading this week will be a solid signal regarding where sentiment is leaning in the USD/MXN. If the USD/MXN continues to trade near short-term lows it could indicate additional bearish sentiment remains ready to strike.
- The U.S will release inflation data on Thursday of this week, until then USD/MXN traders will likely remain rather cautious and simply test current realms.
- Traders today and tomorrow should monitor prices carefully in the USD/MXN, if the forex pair remains calm this will set the stage for a rather interesting results later this week which are likely to produce volatility.
USD/MXN Short Term Outlook:
Current Resistance: 16.89980
Current Support: 16.86800
High Target: 16.92500
Low Target: 16.84900
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