The USD/MXN is showing the ability to sustain values below the 18.00000 level as of this morning in early trading, this as the currency pair has produced strong selling in recent days.
This morning’s early price action in the USD/MXN extended selling momentum and the 18.00000 level has been penetrated lower. The current ratio being seen across trading platforms is around 17.97275, as price momentum continues to display an ability to create lower values. At this time last week the USD/MXN was near the 18.18800.
The selling pressure which developed additional vitality after the Federal Reserve’s FOMC interest rate cut last Wednesday, simply added fuel to the trajectory of the USD/MXN that has been seen since the 25th of November when the currency pair was around 18.53000. The ability to break below 18.00000 this morning might create plenty of new interested technical perspectives for speculators who look at long-term charts.
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The Gulf of Mexico and Intriguing Gaps
The last time the USD/MXN traded consistently within the current values it traverses was in July of 2024. However, technically folks that pull out long-term charts will be able to see that price action below the current ratios being offered present some large gaps, in which volatile trading was taking place in the aftermath of the Mexican elections early last summer. The USD/MXN was trading around 16.98000 and below before the election which got President Sheinbaum elected.
That doesn’t mean the USD/MXN is going to fall to pre-Mexican election values of 2024, but the trading between 17.00000 and 18.00000 in June and July of 2024 was rather violent. The incremental selling of the USD/MXN suggest financial institutions believe lower values are possible still, but day traders should not get too ambitious. The temptation to ride the trend lower remains a potentially attractive ticket, but risk management is needed with solid skills.
Holiday Seasons and Mid-Term Outlooks
This will be the last full volume week of trading in the broad financial markets as large players start to disappear for the upcoming holidays.
- Yes, there may be plenty of financial institutions which look at the USD/MXN and believe it has possibly oversold, but this morning’s early price action suggests for the moment that current values are being accepted.
- If today and tomorrow’s USD/MXN values sustain, and the 18.00000 becomes a resistance level, then this will certainly open the door to consideration of lower price movement and belief that sentiment is looking for lower values.
- Speculators need to be careful.
- USD centric weakness may continue to spark in Forex including the USD/MXN, but the holiday season has a way of creating sudden trends that aren’t always easily explained.
USD/MXN Short Term Outlook:
Current Resistance: 18.01200
Current Support: 17.97090
High Target: 18.06300
Low Target: 18.95600
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