The USD/MXN has sustained its price range after a flurry of bearish momentum took the forex pair to lower depths following the results of the US election. The important psychological support juncture of 20.0000 is within focus, but remains seemingly out of reach short term for speculators. However, if risk appetite remains strong, the USD/MXN could develop another leg down and begin to challenge values the forex pair has not traversed since the early days of March.
Intriguingly, while many forex pairs gave back some of their value to the USD the past day, the USD/MXN has not seen a strong reversal higher. A countermove could certainly still develop, but the ability of the Mexican peso to withstand a surge higher and only reach a height yesterday of nearly 20.47000 may tempt speculators to wager on more downside action to develop.
However, the 20.0000 may prove difficult to puncture lower without a few tests first. On the 9th of November, a spike lower did take place and the 20.10000 level was toyed with and a few price quotes were seen approaching the 20.00000 level, but the inflection juncture held steady and did produce a surge higher to the 20.44000 region for the USD/MXN.
Future markets via the equity indices in the US are indicating a positive and potentially strong opening. If financial institutions show enough optimism near term and create a wave of momentum for the likes of the Dow Jones Industrials, global traders should be braced for residual effects in forex. There are no sure things, but if euphoric trading continues in the States, the USD/MXN may benefit and see another surge lower which includes a test of support levels below.
Speculators may want to continue pursuing selling positions of the USD/MXN. Having take profit positions ready within forex platforms will help too. Traders may be looking for massive moves because of the psychological 20.00000 level below, but it should not be a distraction if profits have already been made which should be cashed out. Traders certainly need to monitor global risk appetite which may demonstrate positive momentum short term. If conditions remain optimistic, the USD/MXN may see its bearish trend demonstrate more strength.
Mexican Peso Short Term Outlook:
- Current Resistance: 20.44000
- Current Support: 20.15000
- High Target: 20.56000
- Low Target: 20.00000
