The USD/MXN experienced another climb higher before going into the weekend, which extended the Forex pair’s rather intriguing short-term bullish trend it saw triggered on the 15th of February. Since testing lows of 19.88000 approximately in the middle of the month, the USD/MXN has incrementally moved upwards.
Worth noting is the fact that the USD/MXN did touch the 20.81000 mark on the 22nd of February and then witnessed a decline towards 20.35000 on the 24th. However, before going into the weekend, a wave of risk-averse trading ensued globally as equity indices took a hit, and this likely helped spur the USD/MXN towards the 21.05000 juncture it tested on late Friday. After touching this high water mark, the USD/MXN did start to reverse lower and, interestingly, it is trading near the 21.73000 mark as of this writing, which is below the high made on the 22nd of February near the 20.81000 level.
Support near the 20.60000 could prove to be significant short term for the USD/MXN. If this level proves vulnerable, the Forex pair could see additional selling generated and a test of lows made on the 24th of February ensue rather quickly. This is mentioned because the lows made on that date near 20.35000 were achieved just before risk-averse trading began to create swift reversals higher in Forex for many currencies trading against the USD.
Nervous conditions may still dominate global trading early this week, but future markets in the US are showing the potential for a positive move in the equity markets. If investors find equilibrium and turn from cautious to passively optimistic, positive global dynamics could help the USD/MXN with bearish sentiment.
Yes, the USD/MXN has experienced a bullish trend since the middle of February. However, traders with a touch of courage and the perception that the Forex pair has crept too high within its long-term bearish trend may believe the existing price levels are an opportunity to seek a reversal lower.
Selling the USD/MXN appears to be a speculative wager which could prove worthwhile. Traders should use stop losses to protect themselves against sudden movements higher, but they can use nearby resistance levels to achieve this defensive posture.
Mexican Peso Short-Term Outlook:
Current Resistance: 20.85000
Current Support: 20.60000
High Target: 20.97000
Low Target: 20.34000
