Risk appetite has helped the USD/MXN create a rather solid bearish trend since early August. Yesterday saw bullish sentiments develop for the USD/MXN, but important key resistance held and the Mexican Peso continues to trade near important support levels. Resistance near the 22.25000 level should be watched carefully today as a gauge of sentiment. Late last week this juncture managed to contain two small upward reversals and then seemingly sparked additional selling of the USD/MXN.
Global equities took a breather yesterday, but Mexican corporate shares have produced solid gains the past month and have followed in the footsteps of positive trading on US indices. The Mexican Peso remains within the stronger boundaries of its bearish trend. If it can maintain values below the 22.25000 juncture and continue to show incremental selling the support level of 21.96000 could be targeted.
Risk sentiment regarding the USD/MXN cannot be overstated if positive momentum is seen within the Mexican indices which could help fuel more bearish action for the forex pair. In late July the USD/MXN traded near 21.85000 and this will be looked at as a critical inflection point by speculators. In early June the 21.55000 to 21.95000 levels were traded until a sharp upwards trend emerged on the heels of negative news surrounding the coronavirus statistics in Mexico.
Challenging economics will be experienced in Mexico like many other nations the remainder of the calendar year. However, speculators and investors may be tempted by risk appetite if it remains steady and global indices traverse higher. Certainly, gains are not guaranteed and profit-taking could emerge, but short term traders should be concerned with technical trends and pursue momentum when possible. The USD/MXN has produced a rather significant bearish trend since late June and resistance levels have incrementally decreased which highlights selling is still significant.
Selling the USD/MXN within a price vicinity of 22.10000 to 22.15000 and looking for targets below may be the best speculative opportunity for this forex pair short term. A stop-loss near the 22.25000 juncture looks like a good choice if you manage the amount of leverage you choose wisely. Near term, it appears the Mexican Peso may be able to maintain its bearish trend and traders may want to pursue the potential of more USD/MXN downward momentum.
Mexican Peso Short Term Outlook:
Current Resistance: 22.25000
Current Support: 21.96000
High Target: 22.40000
Low Target: 21.85000
