The USD/MXN has tested the 20.20000 yesterday and early today in Forex. Today’s early climb punctured very briefly a high made on the 11th on January. However, since testing high water marks this morning, the USD/MXN has actually initiated some bearish movement. Speculators who have been pursuing the USD/MXN long term may find the recent reversals higher of the Forex pair attractive to initiate a selling position.
The USD/MXN has seen bullish sentiment creep into its trading the past few days, but this has also occurred in many other major currencies traded against the USD. The possibility exists that after testing low water marks in Forex, the USD was bound to see a short-term cyclical reversal ensue. Trading has never been a one-way street and experienced speculators understand that reversals are part of the environment.
The USD/MXN remains within the depths of a strong bearish trend and its current price range may prove alluring. Speculators would be wise to be wary of getting into a selling position too early of the USD/MXN and watch it go higher still, but if current resistance levels prove earnest around 20.20000 to 20.29000, the Forex pair may have proven that the recent bullish momentum will be short-lived.
Support levels near the 20.05000 mark need to be monitored. If this level sees a test of its value, traders will likely begin to target the 20.00000 price again within the USD/MXN. The long-term bearish trend of the Forex pair has seen a reasonable amount of trading sustained below the 20.00000 value and certainly if it reasserts, speculators with bearish sentiment may feel there is further downward movement to traverse.
Short term, the USD/MXN has certainly tested the perceptions of technical traders who have bearish sentiment. The test of highs yesterday and early today are enough to remain strong warning signs that further volatility could ensue. Resistance levels above should be carefully monitored and traders should take into account short-term global risk appetite which is showing cautious signs early today.
However, remaining a seller of the USD/MXN continues to look like the logical choice from a speculative viewpoint. Sellers should remain patient and use limit orders on moves higher to initiate selling positions with the belief resistance levels will prove durable and spark reversals lower.
Mexican Peso Short-Term Outlook:
- Current Resistance: 29.20000
- Current Support: 20.05000
- High Target: 20.42000
- Low Target: 19.85000
