The USD/MXN continues to traverse near critical support. The past two days of trading, however, have not been able to penetrate lower values, and a reversal higher was experienced late yesterday, but resistance levels also proved rather adequate. The question for speculators is if the USD/MXN is ready to break free of this post-holiday consolidation and resume its bearish trend, which has been established and consistently produced lower values.
Speculators should be intrigued by the ability that the USD/MXN has demonstrated while sustaining its value below 19.90000. Yes, there was a slight flirtation with value near 19.99000 late yesterday, but upon hitting this resistance level the USD/MXN did move lower. The ability of the Forex pair to withstand a test of the 20.00000 juncture and not see it punctured higher may prove attractive for speculators who believe the USD/MXN is still within shouting distance of important support below.
Support near the 19.77000 level remains an important mark for the USD/MXN. The value was tested early today but then experienced a slight bullish reversal. However, the current value of the USD/MXN continues to hover within the vicinity, which signals that another test of support levels may come sooner rather than later. If the 19.77000 value is proven to be vulnerable again, a test of 19.70000 could ensue rather quickly. And it is the 19.70000 mark which could prove the lynchpin to further bearish momentum if it is brushed aside.
Global risk appetite may prove to be rather mixed today, but optimistic investors still dominate the equity markets, and the USD/MXN bearish trend doesn’t appear ready to disappear near term. Traders may want to be cautious within the current price levels, but resistance above has proven rather strong and, if this remains the case, using the higher values as a location for limit orders to launch selling positions of the USD/MXN appears to be an attractive decision.
Trading early this week in the USD/MXN has certainly been affected by lighter than normal volumes following the holiday season. However, financial institutions will soon be back in full operational modes and the ability of the USD/MXN to sustain its current values and hover closely near important support levels in the midst of an established bearish trend highlights the potential for further downside price action to develop.
Mexican Peso Short-Term Outlook:
- Current Resistance: 19.91000
- Current Support: 19.77000
- High Target: 19.99000
- Low Target: 19.70000
