The USD/MXN has continued to trade within its bearish trend as it moves slightly above one-month low watermarks near the 21.85000. Current price action for the USD/MXN is within the 21.92000 to 21.95000 ratio and will certainly test the fortitude of speculators who choose to pursue selling positions. Higher reversals near the values the Mexican Peso is trading now have occurred consistently since the 11th of June. However, after traversing higher and testing resistance above the USD/MXN has certainly seen selling develop consistently too, which has produced another test of support that is currently unfolding.
Since the 30th of June, the USD/MXN has produced incrementally lower resistance junctures which may prove intriguing to speculators. Traders who choose to remain sellers of the US Dollar against the Mexican Peso technically may have their sights on the 21.46000 levels below as a large target. However, to achieve these bearish values risk appetite globally will seemingly have to remain strong.
Mexico has made news the past couple of days as reports indicate that coronavirus statistics in the nation have been vastly underestimated. Mexico is not alone regarding criticism of under-reporting about coronavirus infection data, but the local headlines will not help the confidence of investors who are searching for positive sentiment.
Mexico’s government has also indicated they expect the country to take up to two years to recover economically from the devastating hit coronavirus has caused. Because of Mexico’s stature as an emerging economy and its proximity to the United States, the USD/MXN serves as an interesting barometer of risk appetite globally when coronavirus and its implications are considered.
However, the USD/MXN does continue to challenge important support levels short term and speculators have a decision to make. Risk reward scenarios must be weighed carefully under the premise of current global risk appetite which clearly remains steady to strong. Even though the USD/MXN is near important support, speculators may continue to pursue selling positions of the forex pair and believe the 21.85000 to 21.90000 levels will be tested.
The 21.85000 could prove to be a major inflection point for the USD/MXN because if it is broken lower with sustained momentum a retest of June lows near the 21.46000 could develop. However, traders who do not believe the Mexican Peso can sustain its current downward pace could try to stand in front of the bearish trend and look for buying opportunities near the 21.90000 mark and look for reversals higher short term. All traders of the USD/MXN should be considering stop-loss limit orders as the forex pair swims these enticing values.
Mexican Peso Short Term Outlook:
Current Resistance: 22.05000
Current Support: 21.90000
High Target: 22.19000
Low Target: 21.85000
