The USD/MXN has been able to sustain its reinitiated bearish price in the short term. Having withstood the expected firefight late last week, due to the U.S jobs number report and reaching a high of nearly 20.08000 on Friday, the USD/MXN never challenged higher marks seen around the 23rd of June around the 20.30000 to 20.20000 junctures. The ability of the USD/MXN to reverse lower and exhibit selling momentum late on Friday testing the 19.74000 ratio was important.
Yesterday’s trading saw the lower values of the USD/MXN sustained and a high of approximately 19.88000 was seen early in the day. As of this morning, the Mexican peso is trading near the 19.85000 ratio and traders have an intriguing decision regarding direction to consider. While the USD/MXN has certainly come off its highs seen in June, when the broad Forex market saw major currencies weaken against the USD, traders may remain nervous regarding those results and hesitate to sell the Mexican peso near these important support levels.
Traders need to take into consideration the potential power of U.S financial institutions as they return from their long holiday weekend will impact results today because transactional volumes will certainly increase. As the USD/MXN trades within sight of important support levels which have proven durable, it may be a wise decision to wait for slight reversals higher to sell the Forex pair and place take-profit orders above perceived support.
Alert traders should keep their eyes on the 19.81000 to 19.78000 junctures as critical support. If the 19.81000 mark proves vulnerable and values fall below the 19.79000 mark in a sustained manner it might set off alarm bells among speculators. The addition of extra trading volume into the USD/MXN could also spark some bedlam if programmed trading reacts to these levels rapidly. However, traders who are selling should not be too greedy and target take-profit ratios that do not keep them in positions which prove to be overly ambitious.
The USD/MXN could also see a reversal higher as a reaction to the selling displayed the last couple of days. Having reestablished its bearish trend, a natural cycle higher could develop, but this also might prove an opportunity for sellers who are patient and want the USD/MXN to creep a bit towards existing short-term resistance levels, as they anticipate yet another bearish cycle to emerge.
Mexican Peso Short-Term Outlook:
Current Resistance: 19.87000
Current Support: 19.81000
High Target: 20.04000
Low Target: 19.63000
