The USD/MXN is around the 18.29720 vicinity as of this writing with a wide spread being displayed, this as the broad Forex market is operating in full as the U.S government shutdown has begun.
The USD/MXN remains within its long-term lows. The currency pair is traversing near the 18.29720 ratio with fast changes being seen via brokers’ platforms early this morning. The U.S government shutdown has begun. If speculators thought that the shutdown would cause a rush of buying of the USD/MXN they have been proven wrong thus far.
Since touching a high of nearly 18.57350 last Wednesday, the USD/MXN has actually produced a rather solid incremental selling trend. Intriguingly the past couple of trading days has seen resistance around the 1.37600 level become rather durable. Day traders need to understand the U.S government shutdown was anticipated by financial institutions and acted upon largely last week. That doesn’t mean there will not be surprises in the coming days, but it does point out that financial institutions may have displayed most of their nervousness about a potential U.S government shutdown last week before it happened.
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No Economic Data from the U.S and Sentiment
If the U.S government shutdown does last into this Friday it will mean that the Non-Farm Employment Change numbers will not be released. The lack of jobs numbers from the U.S government is not the end of the world. Financial institutions instead will trade mostly upon their sentiment generated by outlook. Most financial institutions still believe the U.S Federal Reserve will cut its interest rate again in late October.
The USD/MXN is trading withing values it last saw in a sustained manner in July 2024. Intriguingly the USD/MXN did trade near the 18.20000 ratio with a wild flourish on the 17th of September during the most recent Federal Reserve’s FOMC interest rate decision. The fact that the USD/MXN is still traversing near lows – after reversing slightly higher in the middle of last week – shows that financial institutions are still leaning into a lower USD/MXN.
Sudden Loud News and Potential Volatility
Day traders need to understand that financial institutions have dealt with U.S government shutdowns before. However, even as the USD/MXN trades near lows early this morning and has produced calm waters the past couple of days, speculators should not get too overconfident.
- If U.S politicians suddenly become loud and start to make financial institutions nervous, this could spark some volatility in the USD/MXN and broad Forex market.
- Yet, the past couple of days does indicate that financial institutions are comfortable with thoughts of the USD/MXN in lower realms.
- Traders who do participate as the U.S government shutdown continues should be cautious and stay realistic regarding targets.
- Sideways price action may dominate in the near-term.
- Financial institutions want transparency and a lack of drama from the U.S government.
USD/MXN Short Term Outlook:
Current Resistance: 18.29950
Current Support: 18.29800
High Target: 18.37100
Low Target: 18.26700