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The past few days of trading in the USD/MXN has produced a bright calling card for day traders who are considering pursuit of the currency pair today and tomorrow. The USD/MXN currency pair displayed its low and high via its last week’s results in the span of half a day. As trading action has begun this morning another additional glimmer of risk appetite apparently has also started to shine on the global marketplace, this as financial institutions stand in line for what appears to be an offering of more cautiously optimistic approaches.
Optimism Builds, but Traders Still Brace for Wednesday’s Fed Decision
While technical traders may not want to know about such claims, the de-escalation of military conflict in the Strait of Hormuz the past couple of days has undoubtedly eased tensions among financial institutions. This doesn’t mean additional swift changes of emotions will not occur again, but for the moment the ability to tranquilly look at their trading screens casually, likely has eased nervous sentiment among those trying to grasp their mid-term outlooks.
However, from a technical perspective the velocity laden twists and turns in the USD/MXN delivered the past handful of days also acts as an attractive speculative ground. As the currency pair traverses its near-term lower realms early this morning, while some optimistic attitudes are being highlighted, certainly there is a group of large players who are waiting for another dose of anxiety-filled impetus which will spark more nervous reactions over the next few days. All this while all USD/MXN traders also must keep in mind the U.S Federal Reserve’s interest rate decision lurks this coming Wednesday.
Middle East De‑escalation Cools Nerves but USD/MXN Can Still Whip Around
Last Wednesday’s low in the USD/MXN around the 17.36500 mark saw an astonishing reversal higher within about half a day as the currency pair briefly went above the 17.54000 ratio. Since Thursday’s highwater mark trading has incrementally produced downwards traction. It is not a coincidence that the lower track created the past couple of trading sessions has taken place as the U.S White House has turned the heat down regarding military escalation with Iran. This weekend’s lack of noise from the Middle East has helped the broad Forex market open with calm conditions. The USD/MXN is near the 17.42400 ratio as of this writing depending on the bids and asks. Traders must keep in mind the USD/MXN has a widespread which decreases when the North American markets open typically. And retail traders need to remain cautious because the USD/MXN has shown the ability to suddenly reverse its path quickly, particularly when sudden news developments rattle Forex.
Recent Reversals Show Dynamic USD/MXN Action Is Far from Over
USD/MXN speculators have been here before regarding current values. While it may be tempting to believe in the notion that nervous conditions in the broad marketplace will continue to lessen, by now there have been enough recent reversals caused by sudden sparks of noise from the Middle East to have taught trading lessons to everyone.
The USD/MXN while it looks low via its near-term ratios for the moment is still within a price realm that has produced storms. Dynamic action in the USD/MXN is probably not finished. The looming U.S Federal Reserve FOMC pronouncements on Wednesday will also cause some large players to position themselves according to their perspectives. My personal opinion is that the Federal Reserve will not raise its interest rate this week. Folks still have to adjust to the new Fed Chairman Warsh’s mannerisms.
‘What If’ Scenarios and Stubborn Technical Headwinds Keep USD/MXN in Check
Lower price action may be the flavor of the day regarding temptations for USD/MXN speculators and they cannot be blamed. The broad market continues however, to show that while a slightly weaker USD centric attitude may be showing signs of hope from larger players, that a strong current of momentum has not exactly been demonstrated. The USD/MXN and almost all other major currencies paired against the USD continue to show technical headwinds that are stubborn, this as financial institutions keep in mind ‘what if’ trading scenarios.
De‑escalation Helps, but Middle East Threats Still Hang Over USD/MXN
The lower realms of the USD/MXN are clearly within sight regarding short and near-term ratios and may prove interesting as speculative selling wagers to target even lower depths. However, traders need to keep their risk taking tactics prepared for the potential of volatile influences reigniting and rising to the surface. The de-escalation of military noise in the Middle East has been welcomed, but it cannot be relied upon to continue.
USD/MXN Short Term Outlook:
Current Resistance: 17.44700
Current Support: 17.42250
High Target: 17.48900
Low Target: 17.39550
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