The USD/MXN saw an abrupt spike higher on Friday as geopolitical concerns momentarily threw global Forex into a violent mode, but the currency pair has returned to known near-term prices.
- The USD/MXN is trading near the 17.02450 mark as of this writing.
- Yes, on Friday the currency pair surged to a high of nearly 18.16615 but this occurred as developing news from the Middle East caused a momentary tremor in the global Forex market.
- The USD/MXN quickly recovered its equilibrium and went into the weekend near values it was traversing last Tuesday.
The USD/MXN was trading near the 16.28500 mark on the 10th of April. The USD/MXN has climbed higher like many other currency pairs involved with the USD. The change of rhetoric from the U.S Federal Reserve started to be anticipated early in the second week of April. And last week on the 17th, Fed Chairman Powell essentially said what many financial institutions had already anticipated. Powell acknowledged inflation is stronger than had been hoped for, and the Fed faced uncertain U.S economic conditions. Meaning no change to the U.S Federal Funds Rate is happening soon.
Intriguing Trading Following Powell’s Remarks for the USD/MXN
However a key take away for technical and fundamental traders of the USD/MXN is the fact the currency pair didn’t violently jump on the ‘new’ sentiment being expressed by Jerome Powell. The USD/MXN was trading near the 17.08330 vicinity on Tuesday as it flirted with highs, the high on Wednesday tested values around the same ratios. On Thursday the USD/MXN did climb to a high of nearly 17.17500.
Yes, on Friday the USD/MXN surged on news from the Middle East as financial houses became nervous briefly about the rattling of swords between Israel and Iran again, but then the broad Forex market became calm and the currency pair returned to its known range. Certainly, the USD/MXN is trading above its lows seen in the second week of April, but it is back to testing prices seen last Tuesday. Financial institutions have shifted their outlook regarding the U.S Federal Reserve and adjusted their positions to the mid-term prospects of no interest rate cuts from the U.S central bank.
Support Levels Could Prove Enticing for USD/MXN Speculators
The USD/MXN has been one of the few major currency pairs which have seen a steady bearish trend over the long-term because of the strength of the Mexican Peso. The past week and a half of trading have seen the USD/MXN climb on shifting sentiment, but its return to a known price range is welcome and now the 17.00000 may start to look like a target for speculators in the near-term to test.
- The U.S will release GDP and inflation statistics on Thursday of this week, which will affect the USD/MXN. Until then choppy sentiment may cause a test of the current known technical price range.
- Traders looking for bearish sentiment to reestablish in the USD/MXN may be correct, but they should remain realistic about their short-term targets and guard against the potential of reversals higher with stop loss orders working.
USD/MXN Short Term Outlook:
Current Resistance: 17.03400
Current Support: 17.01010
High Target: 17.06100
Low Target: 16.98700
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