The USD/MXN is traversing within sight of its higher mid-term values as of this morning. Technical charts via a surge in nervous buying upon the opening of the Forex market took the USD/MXN to within 18.16000 today. The last time the USD/MXN was within those current heights was in the second week of December. Yes, the USD/MXN has sold off a bit since after the volatile buying earlier, but it still is lingering near the 18.07630 mark.
Fast conditions and volatility have become a staple of the broad Forex market since the onslaught of the Iranian war. Financial institutions which were hoping for a quick resolution to the Middle East conflict appear ready to accept that mid-term risks will remain prevalent. The USD/MXN is correlating to the broad Forex market as USD centric strength has become a rather dominant fixture.
18.00000 Realm as Near-Term Support
Because of the Iranian war, which is entering its second month as of this past weekend, choppiness and nervous conditions continue to be displayed in global assets. The USD/MXN above the 18.00000 level as of late December, January and into February would have looked overbought to many financial institutions. On the 27th of February the USD/MXN was near the 17.21000 mark.
However in the past handful of weeks sentiment has clearly shifted. Velocity upwards while being met with strong reversals lower is starting to demonstrate that support levels are becoming more durable. While many day traders may be tempted to believe the USD/MXN is in overbought territory, and may in fact be proven correct over time, the reality for the Mexican Peso is that it is suffering like many major currencies as risk adverse trading gathers force. Looking at the 18.00000 level as potential support is not a wrong notion and one that should be watched in the short and near-term.
Today and Tomorrow for the USD/MXN
The trajectory for the USD/MXN higher may not feel correct due to the capable bearish movement the currency pair displayed over the mid-term. But speculators, like financial institutions, need to accept the amount of anxiousness which is causing trading angst and swift changes in the USD/MXN.
Looking for lower momentum may feel correct, but timing when a real trend downwards is going to emerge remains problematic for the time being.
Day traders need to pay attention to behavioral sentiment which is nervous.
If the U.S major indices remain skittish and selling persists, financial institutions may continue to then look for safe haven capabilities.
Which means the USD/MXN could remain elevated.
Support levels need to be watched.
There is a long holiday weekend also ahead that traders need to prepare for, and acknowledge that large players who are nervous may try to position themselves before the Good Friday holiday with cautious mandates – meaning the USD/MXN could sustain current highs and test higher waters.
USD/MXN Short Term Outlook:
Current Resistance: 18.08600
Current Support: 18.05100
High Target: 18.17000
Low Target: 17.99980