The USD/MXN is near the 17.48800 ratio as of this writing, this as speculators are being confronted with wide spreads and notoriously fast conditions in the broad Forex market.
Early trading this morning in Forex has remained volatile. The USD/MXN is near the 17.48800 realm, and with fast conditions prevalent, speculators need to make sure they are monitoring prices carefully before they dare enter the marketplace. Wide spreads via bids and asks are common this morning, this as brokerage houses make sure they are protected against the storm brewing in the broad Forex market.
The USD/MXN was trading near the 17.10000 vicinity Tuesday of last week, but since then the currency pair has turned upwards. The volatility in the USD/MXN is actually somewhat tranquil compared to other major currencies and this may be a signal financial institutions are not fearful of more Mexican Peso weakness developing. In fact, it may be a sign that the USD/MXN is perceived as being in overbought territory by large institutions.
Dangerous Conditions and Fear of More Volatility
Day traders tempted to look for lower moves in the USD/MXN may be correct, but present conditions are volatile and for those without deep pockets this may not be the moment to pursue a chosen direction in the currency pair. The broad Forex market is likely to calm down in the coming hours, but upon the return to trading desks in North America, there may be another round of dynamic conditions that is seen today.
The USD/MXN from a percentage standpoint regarding change in its value moved in a correlated manner to the broad Forex market the past week. The Mexican Peso however remains a favorite of speculators who have been betting on USD centric weakness. However, the move to the 17.10000 last week may not be a legitimate near-term target for USD/MXN traders. Due to the stormy conditions realistic bets looking for small moves lower may be the best gamble short-term.
Higher Terrain Not Out of the Question
Day traders must also remember the Forex markets are prone to nervousness caused by shifts in sentiment that sometimes are not easy to explain.
- Trading the past week has been fast and perplexing because financial institutions are trying to balance their outlooks which are obviously nervous.
- The ability of the USD/MXN to move higher is not out of the question.
- Even though the USD/MXN has enjoyed a strong bearish trend, one that may resume sooner than later, the chance remains that the currency pair may move higher.
- Short-term wagers looking for downside in the USD/MXN should practice solid risk taking tactics today if a speculator is brave enough to participate in market conditions.
USD/MXN Short Term Outlook:
Current Resistance: 17.49800
Current Support: 17.48200
High Target: 17.53200
Low Target: 17.44100
Ready to trade our Forex daily analysis and predictions? Here are the best forex brokers in Mexico to choose from.