The USD/MXN is hovering below the 20.00000 juncture as the forex pair has reestablished its long term bearish trend. Important support junctures are clearly within sight and if they are proven vulnerable the trajectory of the USD/MXN could produce further downside momentum. The 19.90000 to 19.85000 levels could prove significant short term as speculators may decide to wait for these values to see sustained trading within these price vicinities.
Before going into the weekend, the USD/MXN did produced a significant test of lower value as the forex pair briefly touched the 19.75000 mark before witnessing a reaction higher. Reversals off of current support levels have taken place frequently within the USD/MXN since April, and the last time the forex pair moved sincerely traded below the 19.75000 price was in the third week of January.
So is this time different? Is the USD/MXN going to break through these critical support levels and establish a new price range? For a look at where the USD/MXN could potentially traverse lower technical traders are encouraged to click on long term charts, where they will see the forex pair trading below its current prices in February of 2020. In the red hot glow of coronavirus concerns the USD/MXN saw a strong bullish move off of lows in the middle of February 2020. A high of nearly 25.75000 was touched the end of March in 2020. Since then the USD/MXN has largely traversed lower.
Significantly for speculators is that lows in the USD/MXN were hit near the current price range from the end of November 2020 until the first week of February this year. Then the USD/MXN did suffer a bullish move which established a high of 21.60000 in the middle of this March. Since then the USD/MXN has reestablished its bearish stance in a strong fashion. Support slightly below the current price of the USD/MXN has proven durable.
Traders who believe the USD/MXN is going to puncture support levels which are tantalizing close may be making the right choice. Speculators will need to have stop loss orders in place to guard against reversals higher within the forex pair, but interestingly resistance levels do look adequate below the 20.00000 juncture. If the USD/MXN can extend and sustain its lower current values, downside momentum may become quick and volatile.
Mexican Peso Short Term Outlook:
Current Resistance: 19.97000
Current Support: 19.85000
High Target: 20.17000
Low Target: 19.75000
