A quick look at a short-term chart of the USD/MXN may lead traders to believe that the Forex pair remains within a consolidated range. However, a slightly deeper contemplation of the USD/MXN clearly shows the ability of the Forex pair to maintain a rather durable degree of resistance, while incrementally being able to move lower and extend its bearish trend.
As of this writing, the USD/MXN is showing the ability to trade below the 19.90000 juncture with a certain degree of consistency. Important support levels were tested on the 17th of May, when the USD/MXN was trading near a low of 19.71000 which still looks rather strong. Intriguingly for speculators is that the 19.71000 mark remains within plain sight, and reversals higher have not proven to be significant.
As of this writing, the USD/MXN is trading near the 19.83000 ratio, and nearby support targets can effectively be focused on by traders. From a risk/reward perspective, the USD/MXN has certainly produced reversals higher when the nearby support levels have been tested, but speculators should be wondering if this time will prove different.
The USD remains unsteady to weak across the majority of trading within the Forex sphere, and the USD/MXN is correlating rather nicely with other major currency pairs. While traders should not get too exuberant about the potential direction of the current bearish trend the USD/MXN is demonstrating, they cannot be blamed for believing the opportunity exists to hit targets below. If the support junctures of 19.78000 to 19.75000 prove vulnerable, the USD/MXN could be signaling that a breakout lower is potentially lurking.
Continuing to sell the USD/MXN remains a worthwhile prospect even within the current lower depths the Forex pair is traversing. Cautious traders should wait for reversals higher to activate their selling positions.
Traders may want to remain within a quick-hitting mode while searching for more downside momentum, because of the reversals which have been seen when the lower support levels have been touched. However, with support levels clearly in sight, traders should also be ready for a rush of volatility if the USD/MXN does break these mid-term support ratios and suddenly produces a test of the lower values seen in January of this year.
Mexican Peso Short-Term Outlook:
Current Resistance: 19.88000
Current Support: 19.79000
High Target: 19.98000
Low Target: 19.71000
