- The US dollar has rallied pretty significantly during the hours in the early part of Monday, but when you look at this chart it seems very noisy to say the least as we're hanging around the 18.40 level.
- In general, this is a market that is trying to sort out what it's going to do next after a massive shot higher and you also have to keep in mind that the interest rate differential is quite strong in favor of Mexico.
- So that does make this more or less swimming up a river when you are trying to get to the 19 level. But if we have a sudden risk of moving, the US dollar remains king.
Election Concerns, and Not Just the US
There are a lot of concerns when it comes to Mexican politics at the moment after the most recent election and the revelation that perhaps the Supreme Court in Mexico could find itself being chosen by the people. People really just don't know what to do with the Mexican economy. I do believe that we are going to continue to see a lot of chop at this point. If we were to break above the 19 level, then we could really start to see more momentum jump into this market, perhaps sending the dollar to the 20 pesos level.
Top Regulated Brokers
On the other hand, if we were to break down below the 17.75 level, then we could see the US dollar plunge towards the 16.50 level. In general, this is a market that I think continues to be noisy. You have to keep in mind that the Mexican economy is almost totally dependent on the US economy.
So, it does tend to be very noisy in general. Right now, it's neutral, but it certainly looks like the buyers are making some type of statement. If they can get above that 19 level, we could really take off to the upside.
Want to start trading the USD/MXN forecasts? Get our top Forex brokers in Mexico we recommend.