The USD/MXN is around the 17.32610 ratio as of this writing and displaying a wide spread via bids and asks as the broad Forex market has remained within a slightly weaker USD centric mode.
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Going into this past weekend the USD/MXN had shown some downside near-term momentum as it returned to its lower realm. The currency pair in early trading this morning has maintained an incremental downwards stance, but cautious trading has been the dominant theme thus far today and the USD/MXN is near the 17.32610 ratio.
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Technical traders may have an advantage in the short-term per price perceptions and gusts in the USD/MXN, this as financial institutions may be in what is a wait and see approach. The Iranian situation still does not have a great deal of clarity, except to say the U.S White House is obviously trying to pursue an agreement, but the ceasefire that is ongoing shows fragile signs as sparks of violence are reported in the Hormuz Strait periodically.
Clinging to Optimism but Under a Cautious Horizon
The USD/MXN has remained within the lower part of its realm and its ability to stay within sight of depths indicates financial institutions may believe that is the direction – bearish – the currency pair deserves. However, short and near-term considerations make it difficult to marry a position.
Financial institutions which actually frequently do have mid and long-term perspectives and bet on them via their commercial transactions for corporate clients are the ones who are confused and causing choppy conditions. Yet, the fact that the USD/MXN is lingering near lower long-term trading realms shows the bigger folks who might be cautious still think more downside pressure is viable.
USD/MXN Near-Term and Changes in Direction
The USD/MXN is likely to remain rather choppy in the immediate future. As larger volumes come into Forex in the coming hours via the opening of North American trading for the currency pair, sentiment will drive today’s results.
WTI Crude Oil prices remain elevated and if the commodity stays near or above the $90.000 ratio this may be a road sign for speculators to use.
The potential of inflation remaining sticky because of higher energy costs is a concern for inflation and interest rates that could rise.
But if the price of oil stays calm and even lowers it could spur on additional risk appetite in the broad markets including the USD/MXN which did benefit from these circumstances late last week.
The short and near-term remain tricky regarding wagering prospects and day traders need to be patient.
USD/MXN Short Term Outlook:
Current Resistance: 17.32700
Current Support: 17.32150
High Target: 17.35900
Low Target: 17.28200
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