- In early trading this morning the USD/MXN is near the 16.57000 level which is within a value realm that was last traded in November and December of 2015.
- Intriguingly while the USD/MXN sustained its lower values going into the holiday weekend, the currency pair actually traded around the 16.51100 vicinity on Wednesday of last week.
The move lower in the USD/MXN has been clear to all speculators and financial institutions. The Mexican Peso has done remarkably well regarding its ability to gain versus the USD over a rather long stretch of time. Traders however who are simply planning on betting on short positions in the USD/MXN should not do so blindly. Day to day price fluctuations experience reversals higher which are frequently sustained. Retail traders need to remain realistic regarding their targets and not get overly ambitious with short-term wagers.
Lower Trend and Questions about the Near-Term
The Federal Reserve remains in a troubling spot regarding its interest rate policy. Although the U.S central bank discussed openly its desire to cut interest rates in 2024, recent economic data has continued to produce rather stubborn inflation numbers. The Fed may be hard pressed to cut its Federal Funds Rate more than a couple of times this year, some analysts are questioning if the Fed will actually have to stop its plan to cut rates because the U.S economy is too strong.
The USD/MXN is now traversing within a price range that some may believe is oversold, but the ability of the currency pair to make support levels rather vulnerable has been displayed repeatedly. The problem for day traders is that wagers on short term dips should not be overly ambitious, and that there is a definite risk regarding upside reversals. Holiday trading will remain in effect today and speculators should be careful if they are trying to pursue the USD/MXN in these thin market conditions.
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U.S Jobs Numbers this Friday and the USD/MXN
The U.S will release important Non-Farm Employment Change numbers this coming Friday. Financial institutions remain nervous about Fed outlook and weaker jobs numbers are hoped for because this would help the Federal Reserve’s ability to cut interest rates. A weaker jobs report from the U.S could help solidify the downward momentum of the USD/MXN later this week. Until then the currency pair may remain choppy and test its lower price range.
- Today’s trading in the USD/MXN will be light. Traders should use quick hitting targets to try and take advantage of short-term moves if they flourish.
- Tomorrow’s trading will bring a reaction to last week’s late price action, and it will be interesting to see if the USD/MXN can maintain its lower values.
- Resistance near the 16.58000 to 16.59000 levels should be monitored to see if it can prove durable in the near-term.
USD/MXN Short Term Outlook:
Current Resistance: 16.58200
Current Support: 16.55560
High Target: 16.62450
Low Target: 16.53900
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