The past five days of trading have begun to see a sustained value below the critical 20.00000 level for the USD/MXN. Yesterday did produce a test of this mark which is acting as resistance now, but the attack upwards was met with a strong reversal back to the 19.84000 levels. Interestingly, before the run up to the resistance level of 20.00000, the USD/MXN was testing the 19.700000 below.
The USD/MXN has established a solid bearish trend since the end of September. Over the last month of trading, the Forex pair has also seen an incremental decrease in resistance accomplished. Speculators have a solid trend to pursue regarding the USD/MXN, but at the current price level of the Forex pair, it is fair to begin wondering if a reversal higher will be demonstrated.
The USD/MXN has a solid history of creating solid technical trends. The current price vicinity of the Forex pair is now challenging levels seen in early March of this year, meaning the value of USD/MXN is beginning to exert a sustained attack on its pre-coronavirus range. Interestingly, the USD/MXN has a substantial amount of room left to traverse lower if it is going to accomplish values witnessed before the onslaught of pandemic implications.
On February the 3rd of 2020, the USD/MXN was trading near a value of 18.52000. Mexico certainly faces many economic hurdles due to the implications of coronavirus including tough fiscal decisions, but the Forex pair is still above values which leave room for speculative contemplation. No, I am not suggesting the USD/MXN is about to challenge the lower water level of 18.52000 near term, but it is mentioned as a reminder to speculators who believe the Forex pair needs to reverse higher.
Global risk appetite remains steady and, while equity indices may see mixed short-term results, the overall behavioral sentiment being displayed in international markets is positive. This should underscore the ability of the USD/MXN to prove its current resistance levels may be adequate and be used as stop loss orders when pursuing the bearish trend which continues to display a significant trend. Selling the USD/MXN remains a solid speculative wager on slight reversals higher short term.
Mexican Peso Short-Term Outlook:
- Current Resistance: 19.94000
- Current Support: 19.81000
- High Target: 20.00000
- Low Target: 19.71000
