The USD/MXN has re-established its bearish trend in a strong manner, but holiday trading volumes remain light, which may create a bit of skepticism among some speculators. However, the Forex pair continues to knock on the door of important support levels and was able to break through the 20.00000 juncture with relative ease yesterday after suffering a brief reversal higher. Because trading volumes remain unimpressive, market participants should be prepared for momentary spikes in Forex and practice their risk management accordingly.
Intriguingly, the USD/MXN appears to have a solid amount of resistance even as light holiday trading unfolds. This may allow speculators to continue to pursue bearish momentum which has enjoyed a long-term path. If the USD/MXN can establish a trading band of 19.93000 to 19.87000 for a duration, it may be a signal to technical traders that additional downside values are attainable.
The absence of large institutional trading houses may prove dangerous, but if global equity markets continue to spark higher in the short term, it may indicate that optimism is strong and will remain after the holiday season is finished. The ability of the USD/MXN to trade lower is not a new phenomenon and speculators can clearly see via technical charts that the Forex pair was trading at lower values in early March of 2020 before coronavirus implications hit markets.
Speculators may want to sell the USD/MXN on slight reversals higher and this may prove a solid strategy short term. The fear that value of the Forex pair will traverse lower and escape a conservative trader’s grasp is always legitimate, but caution within the markets when light volumes are dominating is a safe avenue. Selling the USD/MXN within a range of 19.95000 to 19.97000 with stop loss ratios working nearby could prove a solid wager.
The bearish trend of the USD/MXN appears to be established, and technically, the Forex pair potentially has further room to traverse lower. Traders should be patient and not expect to see support levels broken dramatically near term because of the lighter volumes in Forex. However, the USD/MXN remains an attractive selling opportunity for speculators who believe its recent trading exhibits that additional bearish action will develop.
Mexican Peso Short-Term Outlook:
- Current Resistance: 20.03000
- Current Support: 19.89000
- High Target: 20.15000
- Low Target: 19.73000
