The USD/MXN is trading slightly above the 18.00000 level this morning. The currency pair did see some bullish price action emerge early this morning as Forex markets opened.
The USD/MXN is back above the 18.00000 level early today. Having spent the better part of last week below the 18.00000 and even challenging the 17.91000 vicinity on Friday before the weekend, the USD/MXN has seen quick buying action emerge this morning. But day traders need to understand light holiday trading still pervades Forex and full volumes will only return gradually. The velocity upwards was quick, but is suspicious.
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The USDMXN is near the 18.01900 price as of this writing with a wide spread being demonstrated. The USD has shown some strength early today, but again the results in the broad Forex market this morning need to be looked upon skeptically. It must be remembered large corporations will take a few days to return back to full action, until then financial institutions which act on their behalf will be relatively quiet.
Uptick and Consideration of Bearish Trend
Day traders that insist on participating in the USD/MXN today may be intrigued by the uptick above the 18.0000 mark and believe the currency pair has been overbought. The USD/MXN has certainly established a solid bullish trend. But fighting against the move higher which has been seen this morning may prove difficult in the short-term, particularly if conditions remain choppy with intraday surges showing volatility because of low volumes.
Regarding narratives in the USD/MXN marketplace, the consequences of U.S actions in Venezuela this past weekend may get some attention by analysts, but it is questionable what type of influence this will have on the Mexican Peso. However, it may prove wise to listen to some of the chatter and see if the move higher in the USD/MXN can be correlated to activity in Mexico’s South American backyard. Yet, this narrative if it develops noise may be wrong.
Holiday Trading and the 18.00000 Juncture
Light holiday volumes are probably influencing the USD/MXN more than anything else, and perhaps the sense that the currency pair was simply oversold in the eyes of some large players who stepped into the Forex market early this morning.
- The 18.00000 level should be watched short and near-term.
- If the USD/MXN maintains a stance over 18.00000 going into the next few days this would be noteworthy.
- But if the currency pair lingers near its current ratios, day traders may believe correctly the bearish trend will reemerge at some juncture.
USD/MXN Short Term Outlook:
Current Resistance: 18.01980
Current Support: 17.99990
High Target: 18.02500
Low Target: 17.96300
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