Speculators who like short quick dashes of volatility need to consider the USD/MXN within their trading menu, this for a potential worthwhile endeavor. The USD/MXN has provided choppy trading the past month but has done this while moving in what can be considered a fairly polite range. Yes, all words can be interpreted differently, by writing ‘polite’ I mean the movement in the USD/MXN can be used constructively if good risk parameters are being used.
Resistance near the 22.90000 juncture is important for the USD/MXN and yesterday’s trading which approached the 22.80000 proved this point again. After a clear bull run upwards with buying of the USD/MXN taking place and then running out of steam, the forex pair suddenly began to reverse and look for support levels to target. Technical traders are now confronted by a USD/MXN which is trading near important support early today and key junctures will prove intriguing if tested.
Key support of 22.22500 could prove critical. The 22.20000 juncture provided an important reversal pivot for the USD/MXN early last week. If these support levels are penetrated the Mexican Peso could find added momentum and see selling of the USD/MXN increase. Risk appetite remains an important aspect within the forex pair, Mexican equities did rather well yesterday but profit-taking appears ready to cash out of winning positions via early calls today in the Mexican stock market. However, if global sentiment continues to show it is ready to stay optimistic, the Mexican Peso may find it continues to find an ability to add value and see the USD sold against the MXN.
Risk management is crucial for traders if they want to attempt short selling of the USD/MXN, but they can be somewhat confident about the ability displayed by key resistance levels to hold their ground. Trader may want to see the USD/MXN trading in a value band between 22.35000 and 22.40000 in order to look for additional downward momentum if they believe risk appetite will remain strong short term.
Stop losses near the 22.60000 may be appropriate for traders who do not want to risk too much capital or are using a lot of leverage. Protecting your account for future trades is always important. Speculative trades when embraced must always consider the possibility of sudden volatility. Shorting the USD/MXN is a speculative trade today, one which may be attractive for a trader with solid knowledge of the market technically.
Mexican Peso Short Term Outlook:
Current Resistance: 22.90000
Current Support: 22.25000
High Target: 23.20000
Low Target: 22.20000
