The USD/MXN has shown the ability to puncture through important psychological support as the 20.00000 level has proven vulnerable. In early trading this morning, the Forex pair sustained its value near this important juncture. Interestingly, the additional strong bearish move within the USD/MXN took place yesterday as financial houses in the US essentially began to close for the long Thanksgiving holiday weekend.
The absence of US investors today within the USD/MXN may allow for volatile price action within the Forex pair and sudden volatility. Speculators who want to continue to chase the bearish momentum within the USD/MXN should consider that trading near term could prove mixed and produce temporary spikes due to a lack of volume. However, the bearish trend of the USD/MXN does appear strong and a very strong reversal upwards may not see the light of day quite yet.
The 20.00000 level will prove important and if trading within the USD/MXN can be sustained below this juncture near term, it could set the table for additional movement downwards. The USD/MXN is now testing values it has not genuinely traded since March of this year and if risk appetite remains optimistic, the Forex pair could see more bearish momentum transpire.
The remainder of the week may prove to be rather challenging for speculators because of the lack of large US institutional investors, which may allow for some chaotic price action to develop. Speculators should be on the lookout near term for sudden small reversals higher. This may leave the option open for traders who want to participate in the USD/MXN today and tomorrow to take advantage of rather tiny, incremental, cyclical movements if they are able to use limit orders, take profit and stop loss ratios correctly.
The USD/MXN has certainly shown the capability to sustain solid bearish movement, which has come on the heels of optimistic behavior in equity indices which has spurred on the stronger Mexican peso. Selling the USD/MXN continues to look like the correct decision to pursue near term, and speculators may want to target values via longer-term technical charts and look at the lower values the Forex pair was occupying late February and early March.
Mexican Peso Short-Term Outlook:
- Current Resistance: 20.10000
- Current Support: 19.85000
- High Target: 20.17000
- Low Target: 19.66000
