The month of August delivered lower trajectory for the USD/MXN. On Friday the 21st and Monday the 24th of August the currency pair went below the 16.90000 ratio as financial institutions showed confidence in selling positions. However, the broad Forex market this past Friday was hit by another rather cautious speech from U.S Federal Reserve Chairman Kevin Warsh which caused some USD centric strength to flourish. The USD/MXN briefly touched the 17.06500 vicinity before starting to filter lower again.
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Trend Lower and Selling in the USD/MXN Thoughts
The USD/MXN has turned in a steady lower trend. The currency pair was traversing near 17.35000 in the early days of August, but before that had showed plenty of downside power and was suffering from a storm of reversals in July. But on the 4th of August the USD/MXN finally showed enough power to penetrate and sustain value below the 17.20000 level. Consistent selling has been seen in the in currency pair since then, but it can and should be pointed out that USD centric weakness has been illuminated in the broad Forex market too.
The USD/MXN is now traversing values it last saw in June of 2024, this as the Mexican election was held on the 2nd of June that year. Previous to the election the USD/MXN had been trading within lower realms frequently (yes with upside action too) and prices around the 16.80000 to 16.70000 were being challenged. In other words lower values in the USD/MXN have been seen before and financial institutions may believe there are reasons to once again lean into a stronger Mexican Peso.
Difficult Choices While Chasing Lower Trajectory
However, clearly the economic and political situation now compared to pre-June 2024 is vastly different.
While the USD seemingly has entered another cycle of weakness, the Mexican economy is not exactly vibrant.
Traders have to be careful not to get too over confident regarding the trend lower, because as support comes into sight technically - it may cause a fluster of reversals higher due to algo-powered orders lurking in the USD/MXN which still believe lower moves are tentative.
However, the ability of the USD/MXN to touch the 16.90000 level only a week and a half ago shows that financial institutions may have some firepower to send the currency pair lower.
USD/MXN Outlook for September 2026:
Speculative price range for USD/MXN is 16.84000 to 17.27000
The USD/MXN has certainly delivered traders downwards momentum. But betting blindly on downside price action is precarious at best. Moves lower aren’t likely to carry a significant amount of price velocity as they struggle with technical support ratios that have plenty of programmed trading set around their ratios. Meaning that speculators looking for moves that create fast trading it actually may come from upside reversals when reactions to lower values occur. This opens the door to technical traders looking to take advantage of sentiment in the marketplace.
Speculators need to use conservative leverage as always. For traders looking for continued downside action from the USD/MXN, they cannot be blamed and may be proven current over the coming weeks. The next Federal Reserve decision is on the 16th of September and this will certainly cause plenty of volatility in the USD/MXN leading up to the FOMC announcement and afterwards. Choppy conditions may be problematic in the coming weeks as financial institutions try to gauge their outlooks while a lack of clarity persists.
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