The USD/MXN is near the 18.45775 mark as of this writing, but traders need to take a look at the wide spreads in the currency pair before venturing forth with a speculative position today.
After Friday’s jump in the USD/MXN to nearly 18.62200 with fierce speculative buying erupting, when President Trump suddenly said he would penalize China more via tariffs, Monday has shown some early tranquility. The USD/MXN as of this writing is near the 18.44775 mark, but day traders should compare this value to the markets as they are reading. Conditions are fast and may remain that way all day long.
Speculators who see the USD/MXN as selling opportunity cannot be blamed logically. But this will be based on the hope that financial institutions will return to calm in the coming hours. Certainly the move lower this morning is a solid sign for the USD/MXN and broad Forex market, but more uncertainty could prove to be rather troublemaking. Day traders are strongly advised to use entry orders to protect themselves against wide spreads via bids and asks which are being seen throughout Forex today, including the USD/MXN.
Normal Trading to Come with Nervous Sentiment
The USD/MXN was trading near the 18.29900 level on Thursday, this before nervous sentiment ripped through Forex on Friday and the currency pair did see sudden highs emerge. However, even as the jump occurred in the USD/MXN it should be noted that the price velocity upwards clearly indicated the move was a temporary reaction. This morning’s selling and return to lower depths is a solid sign for bearish activity. But dangers still lurk and day traders should not get overconfident in the USD/MXN regarding trend short-term.
Day traders who are conservative should allow the next few hours to pass to see how U.S financial institutions react when they return to their desks. There is a belief that the USD/MXN may see more tranquil trading based on the assumption financial institutions will have had the chance to become calmer this weekend. They have seen spikes caused by rhetoric before from the White House, so maybe day traders will want to bet on the notion large players will return to their outlooks held before President Trump spoke last Friday regarding tariffs on China.
Speculative Positions in the USD/MXN Short-Term
Volatility in the USD/MXN may be seen over the near-term. Traders need to be aware based on Friday’s trading results that nervous sentiment is still abundant and ready to act in Forex.
- The USD/MXN may look highly valued based on recent results, but traders should be realistic and not get ahead of the large financial institutions with their wagers.
- Looking for realistic targets is important.
- The use of stop losses will be important today and tomorrow to guard against sudden fluctuations if the USD/MXN turns nervous again.
USD/MXN Short Term Outlook:
Current Resistance: 18.49800
Current Support: 18.45400
High Target: 18.53090
Low Target: 18.41980
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