The USD/MXN is near the 18.79000 ratio as of this writing, the highs being traversed early this morning have occurred after a low around 18.51000 was seen last Wednesday.
The past couple of days have seen increased buying of the USD/MXN. After testing important lows around the 18.51000 mark in the middle of last week, the currency pair has moved higher and as of this writing the 18.79000 ratio is being challenged. The upwards momentum created in the USD/MXN the past two and a half days is intriguing because the price action isn’t correlating to the broad Forex market in lock step.
Before traders decide to assume the USD/MXN has suddenly developed its own unique trend, it should be remembered that the currency pair has been able to create a significant bearish trend the past handful of months. Consideration has to be given to the possibility that financial institutions simply believed the USD/MXN had reached oversold territory and responded with upwards price action.
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18.80000 as Resistance Short-Term Considerations
The move early this morning to highs around the 18.81000 were met by selling and traders have an interesting inflection point to consider via the 18.80000 level. It is possible that financial institutions may react to this level as a place where the USD/MXN may be considered overbought. The 18.85000 ratio did get some attention on Thursday of last week but created headwinds when flirted upon.
Near-term consideration may believe the USD/MXN is within an attractive speculative realm and that current values near the 18.80000 have room to traverse lower. Specualtors should use solid risk taking tactics and conservative leverage if they are going to look for downside price action based on perceived resistance levels coming into force. It should always be remembered the USD/MXN can move quickly.
Federal Reserve Influence and Tariff Noise for the USD/MXN
Traders who have been pursuing lower price action in the USD/MXN may have suffered the past couple of days due to the upswing in buying. However, the move higher if the current resistance levels hold near-term may indicate that additional impetus is being looked for in order take the USD/MXN lower again.
- The Federal Reserve holds its Jackson Hole Symposium later this week.
- If Fed officials sound dovish during this conference it could spark additional selling of the USD/MXN.
- However, there are a few days between then and now, meaning the current price realms will likely be tested and may provide choppiness until financial institutions create more momentum.
- Risk appetite may be a factor in the USD/MXN near-term and traders should not get too ambitious regarding targets today and tomorrow.
USD/MXN Short Term Outlook:
Current Resistance: 18.79900
Current Support: 18.77800
High Target: 18.84700
Low Target: 18.75100
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