Speculators within the USD/MXN have been treated to rather volatile market action. While the USD/MXN continues to tests important lows, the Forex pair has also delivered rather constant volatile bursts upwards for traders to take advantage. The question is if the constant testing of support and the rather predictable bursts upwards will continue.
The USD/MXN is trading near the 19.87000 mark as of this writing and did see a low of 19.80000 earlier. However, the USD/MXN has also traded near highs of around 20.00000 over the past few trading days and, in fact, the Forex pair touched the 20.16000 level on the 8th of July. The 19.80000 mark continues to inflict a lot of sudden momentum and traders who have had the courage to be buyers around this level may be enjoying quick-hitting profits, if they target nearby take-profit targets which are not overly ambitious.
The choppy conditions within the USD/MXN should be expected to continue until a breakout happens that changes the current price range of the Forex pair. However, that may not take place for a while, the current price ratio of the USD/MXN has become a rather consistent testing ground. While lows have repeatedly been tested near current ratios, the inability of the USD/MXN to penetrate and sustain prices below the 19.77000 ratio should not be underestimated. Until the Forex pair proves it can consolidate below the 19.80000 juncture, traders may be tempted to continue to merely take advantage of incremental reversals.
Trading who want to be buyers of the USD/MXN around the 19.83000 to 19.81000 junctures on slight moves downward while looking for upside action cannot be faulted. Yes, stop loss ratios need to be used and kept tight. If the USD/MXN were to break below the 19.78000 level, it could signal that lower movement can develop. On the other hand, traders who want to sell the USD/MXN are encouraged to be patient and wait for slight movements higher which test the 19.89000 to 19.92000 ratios and look for downside momentum to emerge.
Technical charts are clearly showing that the USD/MXN remains on the lower side of its price range. However, current conditions do not demonstrate that a significant bearish cycle will develop, which means short-term traders may be able to take advantage of the range and make their wagers accordingly based on the support and resistance perspectives while looking for effective reversals to develop.
Mexican Peso Short-Term Outlook:
Current Resistance: 19.97000
Current Support: 19.78000
High Target: 20.14000
Low Target: 19.64000
