The USD/MXN has exhibited a dynamic range the past five days of trading. The forex pair remains steadfast within a strong bearish trend, but it has seen volatile reversals higher which will keep speculators guessing about its next moves in the coming days. As of this morning the USD/MXN is near the 21.13000 vicinity while displaying some capability of sustaining values under this juncture.
When trading came to a close of Friday, what proved to be in evidence was the notion the USD/MXN didn’t see a surge of late buyers who were scared of the coming weekend. This seems to indicate financial institutions were not looking to capture what they might have suspected was bearish momentum which was too strong and would produce a reversal when the week opens today.
The momentum of the USD/MXN has proven strong with a decisive downward trajectory since mid-May, but its trading has not been easy for short term speculators because the forex pair has also endured rather strong reversals higher. However, these reversals higher have been stopped rather adequately by an incremental decline via resistance levels. Nevertheless, last week the USD/MXN tested the 21.16000 support level and then reversed to the 21.53000 mark in two days, which may have caught sellers out in the cold and suffering from losses.
Global risk appetite remains a dominate theme within the USD/MXN and so does the outlook for the US Dollar on its own merit. Mexico like other nations faces tough economic implications regarding its economy as it battles coronavirus and its long term implications. However, overall global risk appetite has remained steady to good and this has created a push for speculative selling in the USD/MXN which has been rewarded. No matter how many questions hover over the Mexican government and its ability to manage its short term economic problems, trading of the USD/MXN has remained within a fairly constant bearish trend.
As the day begins the USD/MXN remains close to critical support levels, if these junctures can be broken lower targets below 21.0000 will become the focus for traders who remain sellers. Stepping in front of the bearish trend of the USD/MXN and buying the forex pair on the notion reversals higher will certainly take place cannot be faulted, but speculators should use adequate stop losses and not become too greedy if they are chasing higher values near term.
Mexican Peso Short Term Outlook:
Current Resistance: 21.16000
Current Support: 20.98000
High Target: 21.30000
Low Target: 20.84000
