USD/MXN traders saw long-term lows approached in the currency pair late last week, but a sudden reversal upwards early this morning occured as holiday trading quirks hit the broad Forex market.
USD/MXN traders who are intent on pursuing the currency pair out of the starting gates early today are advised to have a cup of coffee and relax first. Trading volumes early today are producing volatility as financial institutions get back into full swing after not being fully positioned late last week. The U.S Independence Day was celebrated on Friday, but by late Thursday volumes started to decrease as large players left for their long weekends.
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Meaning the results of the USD/MXN and other currency pairs should be looked at with some skepticism regarding results late last week. While the USD/MXN did fall to around the 18.62990 vicinity and held onto its lower range going into the weekend, the currency pair has jumped higher in early trading today and is near the 18.72100 ratio with fast fluctuations being seen. Full volume will return to Forex in the next couple of hours and day traders should be careful.
Lows Fought for and Attained but Skepticism Remains
Yes, the USD/MXN has been producing a solid bearish trend in recent trading. This morning’s jump higher may be a reaction to what some consider an oversold market and serve as only a brief reversal. However, there are risk events looming in the next two days including more tariff news developing. President Trump’s deadline for negotiations is on the 9th of July. While Mexico has stayed out of the limelight, questions do persists regarding trade agreements.
Financial institutions who have been keen on USD centric weakness since early April might find that the near-term causes a bit of a storm again. Speculators should brace for the potential of choppiness today. This morning’s rise higher in the USD/MXN may not only be a reaction to the belief the currency pair was slightly oversold late last week, but show that some large players are turning cautious ahead of the upcoming tariff deadline.
18.70000 as a Trading Barometer Short and Near-Term
Traders who firmly believe the downwards trajectory of the USD/MXN is going to reignite sooner rather than later cannot be blamed. Technically the USD/MXN appears to have the capability of recapturing realms below the 18.70000.
- However, because of the tariff deadline approaching, financial institutions may want clarity delivered before they dare to step into their weaker USD centric sentiment in a strong fashion.
- Speculators should be cautious over the next 48 hours.
- The combination of full volume returning in Forex and nervous outlooks is likely to cause volatility that many traders may be uncomfortable experiencing.
USD/MXN Short Term Outlook:
Current Resistance: 18.73500
Current Support: 18.70200
High Target: 18.75600
Low Target: 18.68100
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