The USD/MXN flirted with the 18.00000 early on Monday as Forex became a whirlwind with nervous trading dominating the landscape. The currency pair is around the 17.71575 mark at this moment, but fast conditions remain a thorn in the side of any day trader tempted to wager. Short and near-term notions will offer opportunities for betting, but conditions in Forex and the USD/MXN will remain dangerous.
Wide spreads are also being seen across the board and the USD/MXN is not escaping the clutches of nervous behavioral sentiment which seeks clarity. The problem for day traders is that the short-term looks very different compared to mid and long-term outlooks for the USD/MXN. Financial institutions may believe that in one month calm will be prevalent, but risk adverse feelings are causing a churning Forex market for the moment and this is likely to continue into the weekend.
What Was Isn’t Anymore
On Friday the 27th of February the USD/MXN was traversing around the 17.17000 vicinity, and some optimistic traders regarding the Mexican Peso were likely gearing their sentiment towards ideas of 17.00000 coming into sight. However, the Iranian war started on the 28th of February and that weekend’s news grew loud, by early on Tuesday the 3rd of March the USD/MXN was spiking higher.
The current realm of the USD/MXN is traversing marks seen on the 3rd of March, but conditions have been dynamic. Technical traders may believe they have a basis on judging values via short and mid-term charts, but it is sentiment within financial institutions which is causing problems and swirling values. Day traders need to use strong risk management if they insist on trading today and tomorrow. For the moment pre-Iranian war lows should be considered wishful thinking.
Overbought Ideas in the USD/MXN
The broad markets will need calms winds in order to create less violent conditions for USD/MXN traders.
Some may believe correctly that mid and long-term the USD/MXN appears overbought and a return to the bearish trend will reappear.
But betting on this happening in the next couple of days could produce unwelcome results if loud noise comes from the Middle East.
While it is good to be optimistic, it is also wise to be patient and cautious while clarity is sought.
The USD/MXN may look overbought at its current values, but traders should not get overly ambitious and be willing to use quick hitting wagers that try to take advantage of momentum.
However, the choppiness in the USD/MXN correlating to global Forex will not make this an easy game the next two days.
USD/MXN Short Term Outlook:
Current Resistance: 17.72100
Current Support: 17.68200
High Target: 17.74500
Low Target: 17.64100