The USD/MXN continues to deliver an extremely tight trading range short term, and traders hoping for a breakout may have to wait a while longer. Volatility within the USD/MXN is a normal staple of the Forex pair and the value band achieved the past week of trading may be causing a stir among speculators who believe it is not possible for the tranquil landscape to remain intact.
Interestingly, the USD/MXN has seen its technical support and resistance levels grow closer within the past couple of days. The ability of the USD/MXN to patrol waters below the 20.00000 since the middle of April is also astonishing. It is not astonishing because it has not climbed above 20.00000, it is astonishing because even as the USD/MXN traverses below this juncture, it has shown little inclination to break lower and challenge values last seen in January of 2020.
Support junctures have grown extremely tight and the notion that the 19.86000 to 19.80000 levels are so close is tantalizing. However, the USD/MXN as of yet has not proven that it can easily obtain these values, which makes targeting them as a take-profit point intriguing, but also rather frustrating. Traders within the USD/MXN are used to rather jumpy changes in price, and the ability the past week of the 19.80000 level to prove durable has been impressive.
The notion that the USD/MXN is deep within a long-term bearish trend cannot be disputed; the question is if current support levels will continue to hold and cause reversals, or if these junctures will eventually become vulnerable. Traders may want to continue exploring downside momentum within the USD/MXN by waiting for slight reversals higher and aiming for the current support levels as a take-profit area.
Selling the USD/MXN likely remains the correct technical tactical choice. Speculators will need to practice patience and may want to accept the notion that quick-hitting trades for the moment are the best way to proceed when trading the Forex pair. Support levels do look attractive and, when and if they are penetrated lower, the USD/MXN may see swift trading waters return. Yes, reversals higher may take place, but for now the 20.00000 level feels like a distant value, and resistance near the 19.92000 to 19.95000 marks may remain firm.
Mexican Peso Short-Term Outlook:
Current Resistance: 19.95500
Current Support: 19.85500
High Target: 19.98800
Low Target: 19.78800
