Risk assessment in the USD/MXN like all major currency pairs remains rather anxious. This weekend’s news developments delivered another set of grey skies regarding clarity because of the Middle East situation. Financial institutions dealing with the USD/MXN have created what appears to be a ratio in which tests of sentiment are being demonstrated around the 1.36500 area. Higher ground and lower depths have been seen over the past handful of days, but a middle ground has become known.
Day traders in early morning price action must be mindful of the wide spread via bids and asks in the USD/MXN. The Iranian war remains the main talking point, but financial institutions are also dealing with the rather perplexing realization that risk appetite in major equity indices remains high, even as the price of WTI Crude Oil straddles higher terrain. Meaning that large players in Forex, commodities and equities are walking a tightrope in which a strong dose of wind (rhetoric or developing news) may affect things in a rather volatile manner.
Lower Realm Notions and Standing in Place
The ability of the USD/MXN to traverse a middle ground over the past handful of Forex sessions, certainly will allow speculators the ability to perceive there is an opportunity to pick a direction and watch it become a reality regarding chosen directions. However, there are no guarantees that past results will equate into future ones.
Yet, if realistic targets are used that are not overly ambitious, the USD/MXN with a strong dose of patience may finds itself testing a rather interesting technical range. The situation in Forex remains a risk on and risk off saga regarding USD centric sentiment. This has helped create the rather intriguing range the USD/MXN has demonstrated the past week.
Lows of March and Speculative Trading in the USD/MXN
The currency pair remains within known lower realms, but appears to need another dose of positive risk appetite in the global markets to break back to ratios seen in the second and third weeks of April.
Lower terrain was also seen in March which may look attractive to USD/MXN traders, but again – without a lack of clarity for financial institutions – may be hard to attain.
Trading this morning has already showed signs of being nervous and that is because of the questions surrounding the Iranian war.
The price of WTI Crude Oil may provide a solid barometer in Forex including the USD/MXN in the coming hours and days.
In the short-term day traders should remain patient and alert regarding their goals.
USD/MXN Short Term Outlook:
Current Resistance: 17.36600
Current Support: 17.35600
High Target: 17.47500
Low Target: 17.28300