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USD/MXN Analysis: Nervous Battle at Support Emerging for Speculators

Behavioral sentiment globally continues to exhibit signs of risk appetite which may lead some traders to pursue more bearishness in the USD/MXN. 

The USD/MXN is near the 18.87560 ratio as of this writing. On Thursday of last week the USD/MXN saw some sustained trading above the 17.00000 level and a high around the 17.06990 fought over. The currency pair did start to move lower however, and by late in the day was near the 16.92000 ratio. On Friday in the wake of the weaker than anticipated PPI numbers from the U.S the USD/MXN moved towards a low of nearly 16.82850 momentarily.

USD/MXN Today: Analysis 15/01 Chart | DailyForex.com

The currency pairs USD/MXN went into the weekend essentially swimming near the values the currency pair is now traversing. Speculators today need to remember U.S banks are mostly closed for a holiday and Forex volumes will be lighter than normal, but this opens the door to the potential of volatile conditions being displayed tomorrow. Financial institutions are continuing to exhibit signs of a weaker USD outlook, but the range of the USD/MXN the past handful of days was rather dynamic, particularly as the currency pair tested the 17.00000 level.

USD/MXN Psychological Realms Important for Traders

But once again the Mexican peso against the U.S. dollar has moved lower and today’s trading should be watched to see where resistance levels prove durable. If the higher 16.90000 ratio remains strong and the USD/MXN is not able to sustain movement above this mark in the short-term it might open the door to consideration financial institutions continue to lean towards more bearishness in the USD/MXN.

Yet, the mid-term price range of the pair has seen the current levels before and actually lower. On the 8th of January the USD/MXN traded below the 16.80000 level momentarily, which tested values seen in late August of 2023. Because the Mexican Peso trend has been strong against the USD over the long-term, and because the USD/MXN is now essentially testing support ratios last traded in a solid sustained manner in the summer of 2015, speculators may feel rather cautious.

How Low Can the USD/MXN Go?

Behavioral sentiment globally continues to exhibit signs of risk appetite which may lead some traders to pursue more bearishness in the USD/MXN. The currency pair would have to show the ability to sustain another leg down and maintain values below the 16.80000 mark. Short-term traders today should not get overly ambitious because light holiday markets will be seen due the U.S MLK observance today.

  • If current support levels continue to be traded in the short-term it will open the doors to intriguing results tomorrow.
  • Retail Sales data will come from the U.S on Wednesday and create impetus for the USD/MXN. Until then behavioral sentiment may continue to show that risk appetite is abundant, and this may create the temptation to look for slightly lower moves lower in the USD/MXN.
  • Conservative traders may want to see resistance levels approached before igniting selling positions in the USD/MXN.

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    USD/MXN Short Term Outlook:

    Current Resistance
    16.89450
    Current Support
     16.86310
    High Target
    16.92800
    Low Target
    16.83075

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    Robert Petrucci
    About Robert Petrucci
    Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.

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