The USD/MXN offers speculators a chance to test their short-term perceptions, which may be fueled by technical and contrarian sentiment.
Experienced day traders know that speculating on the direction of Forex is difficult and understand there are no guarantees for positive results. While this sentence serves as a warning, it also functions as an attractive idea for speculators who like to search for opportunities in assets via markets they feel dynamic price action and advantages can be found. The USD/MXN price range in the past week may offer this chance.
The USD/MXN is near the 19.71000 ratios as of this writing. A momentary high in the USD/MXN yesterday near 19.86000 is noteworthy, this upwards value had not been seen since the end of October. The USD/MXN also touched a low of around 19.11000 on Thursday of last week. The long-term trend of the USD/MXN has shown signs of strength from the Mexican Peso repeatedly, compared to many other currencies which had been weaker against the USD.
USD/MXN Reversal Higher is Intriguing for Traders
The ability of the USD/MXN to climb in the past few days may be viewed as a chance by speculators who are contrarian and still believe selling pressure will remain the dominant feature of this currency pair long-term. The strong reversal higher from the lows seen on Monday and Thursday of last week, which had last been traded in February of 2020 should be highlighted technically. Long-term considerations may have caused the strong buying spree of the USD/MXN the past couple of days based on the thought the currency pair had been oversold.
Now the question is if the USD/MXN has been overbought
Day traders are speculators and they are also wagering on the direction of their chosen currency pair. While many people might not like to be defined this way per the above statement, trying to determine the direction of the USD/MXN and other Forex pairs is not easy – it is certainly not an exact science.
Being a contrarian and going against the market trend may seem too aggressive a definition for some traders. However, technical traders do this every day in reality, particularly if they are using support and resistance levels to determine where the market is going and then open a position looking for a reversal of direction. The USD/MXN offers the chance to be a contrarian now:
- Resistance near the 19.75000 to 19.80000 ratios looks durable and may cause selling pressure to be ignited, because financial houses may think this value is overbought territory.
- Looking for support levels to be challenged near the 19.69000 to 19.66000 levels in the short term may prove a worthwhile wager. Risk management is urged for all.
USD/MXN Short-Term Outlook:
Current Resistance: 19.75800
Current Support: 19.68900
High Target: 19.88100
Low Target: 19.59900
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