After putting in a day of solid gains mid-week, the Mexican Peso lost some value yesterday as the USD/MXN was bought. However, the Mexican Peso remains within a healthy range and has not proven dangerous regarding its volatility as long as leverage is being used wisely. Current resistance levels for the USD/MXN appear to be within the 22.7500 to 22.8000 framework.
The current support level for the USD/MXN appears to be active around the 22.5500 value this morning. However, this support could prove vulnerable quickly if it is breached downward. The past five days of trading have seen plenty of price action between the 22.0000 and 22.5000 levels. If risk appetite emerges over the next handful of hours the USD/MXN may see increased selling and renewed tests of better values for the Mexican Peso.
The past five days of trading have seen a value range of 21.8000 up to the 22.9000 level. A look at a one month chart of the USD/MXN places its current value in the middle of a range which has been between 21.5000 and 23.7000. In April of this year the Mexican Peso approached the 25.8000 juncture, but since then has gradually added value against the US Dollar.
The Mexican Peso can be heavily influenced by global market sentiment and is particularly reactive to economic news from the United States. Risk appetite is showing signs of bouncing back after nervous trading earlier this week; the Mexican Peso has actually produced a rather stable price range and is positioned technically with enough perception to look undervalued.
Traders with a speculative eye for the USD/MXN may find the price range between 22.6000 and 22.7000 as an attractive area to sell the currency pair. The Mexican Peso is not a currency some traders want to hold onto over the weekend, but if risk appetite continues to brighten later today the USD/MXN could prove an intriguing short term play. The Mexican Peso, for those who believe it, has the ability to gain value and may find that its support levels will be tested more than its resistance before the day is finished.
Mexican Peso Short Term Outlook:
Current Resistance: 22.7500
Current Support: 22.5500
High Target: 22.9000
Low Target: 22.3000
