In early trading this morning the EUR/MXN has seen some bullish behavior flourish within the forex pair. However, speculators have a wide menu of technical charts to consider before choosing which flavor they will decide upon to pursue a direction. Short term trading conditions also need to acknowledge forex will likely have lower volumes today due to the absence of US financial institutions which may limit the ability to gauge overall risk sentiment clearly.
The past month of trading within the EUR/MX has produced a bearish trend. On the 4th of August, the forex pair was near a high of 26.90000 and as of this morning, a value of 25.97000 is currently being tested. However, it is also important to note the past three months of trading within the EUR/MXN have produced bullish movement, in early June the Mexican Peso traded near the 24.18000 level.
What traders of the EUR/MXN need to understand is that since mid-March the forex pair has traded between 24.30000 and 26.90000 regularly. Since early July the EUR/MXN has largely moved between 25.30000 and 26.70000. This trading range presents an opportunity for speculators who have a desire to speculate on risk appetite using the EUR/MXN as a barometer. The support level of 25.30000 is enticing.
Short term support has proven fairly adequate near the 25.50000 level recently and has produced moves higher but the price action has taken place in a fairly tight range. Speculators may suspect risk appetite will prove cautious near term after seeing US equity markets struggle late last week. As American investors contemplate their trading tomorrow, while they enjoy their holiday today some speculators may expect cautious behavior to be exhibited. If this does develop the EUR/MXN could see additional bullish action and raise the expectation that resistance levels around the 25.90000 to be targeted and vulnerable.
Buying the EUR/MXN with limit orders near the 25.53000 could prove interesting for speculators in the short term. Trading volumes will be light today which may cause some sudden spikes to emerge unexpectedly; stop-loss ratios need to be used to guard against gyrations. Short term traders who want to trade the EUR/MXN should be careful, but looking for bullish sentiment to emerge may be the right decision near term.
Mexican Peso Short Term Outlook:
Current Resistance: 25.68000
Current Support: 25.48000
High Target: 25.90000
Low Target: 25.40000
