The USD/MXN has entered today’s trading within the upper part of its near-term range, but this occurred after lows made last Tuesday touched values last seen in August of 2015.
- The USD/MXN is near the 16.60600 level as of this writing. On Friday a high was attained around the 16.74585 mark before stumbling slightly before going into the weekend.
- The USD got stronger across the Forex board on Wednesday and the USD/MXN mirrored the results.
- The currency pair had been testing the 16.25835 ratio on early Tuesday of last week.
The ability of the USD/MXN to keep its momentum lower early last week continued the demonstration of the Mexican Peso to remain one the stronger major global currencies over the past few years. However, the upwards climb in the USD/MXN as of Wednesday – after the U.S CPI numbers were published – shows a healthy correlation exists for the currency pair too with the USD.
Near-Term Speculative Worries for the USD/MXN
The broad Forex market is about to embark on a nervous week of trading. The USD has gained well against most currencies over the past couple of weeks as U.S economic data has continued to put the Federal Reserve’s ambition of cutting interest rates into peril. Higher inflation data last week via the Consumer Price Index numbers were not welcomed by financial institutions which had been leaning towards a weaker USD outlook.
The USD/MXN responded certainly with buying momentum and swiftly gained on Wednesday suddenly challenging and surpassing the 16.50000 level. Friday’s published outlook about U.S consumers expecting inflation to remain steady also put the Forex market into a fury and the USD/MXN responded with another leg up touching its eventual high as stated above. However, intriguingly speculators of the USD/MXN can clearly see technically via a three, six and importantly a one month chart the currency pair remains in bearish trend. Short-term versus mid-term considerations though are tricky for Forex traders.
Nervous Behavioral Sentiment and USD/MXN Wagers
Trades should anticipate nervous results from financial institutions early this week as they try to find equilibrium in the broad Forex world after the strength of the USD was once again put on display. The question for USD/MXN traders is when resistance levels will prove durable and if the currency pair will resume a downwards slope. There is little doubt some traders may try to target the lower realms seen early last week, but they should not get over confident and the near-term will prove potentially dangerous.
- The U.S will release Retail Sales figures today which will cause a reaction in the USD/MXN.
- If retail numbers are weaker from the U.S this could spur on some USD weakness in Forex.
USD/MXN Short Term Outlook:
Current Resistance: 16.62775
Current Support: 16.58990
High Target: 16.68890
Low Target: 16.54910
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