The USD/MXN is trading near three-year lows as its bearish trend has continued to make support levels appear vulnerable in the past two days.
The USD/MXN is near the 18.39700 vicinities as of this morning. The ability of the USD/MXN to achieve its lower stance the past two trading days is remarkable considering the notion U.S. economic data has given many financial houses a rather stern reminder of why it is dangerous to bet against the Federal Reserve when it takes an aggressive stance.
Many other major currencies have seen their bearish momentum stop versus the USD since the first week of February. But the USD/MXN has not only recovered downward movement, but it is also testing three-year lows. The Mexican Peso remains a strong currency against the USD.
The USD/MXN is now challenging Forex values not seen since February 2020. Intriguingly in early March of 2020, coronavirus implications took hold of the USD/MXN and the currency pair rocketed higher and eventually touched 25.76500 in the first week of April in 2020.
Since reaching those apex highs the USD/MXN has fought lower, but obviously, it has not been a one-way avenue downwards. And it should be remembered by day traders the USD/MXN is not guaranteed to still go lower. Reversals higher do occur and yesterday’s selling pressure could spring some speculative skeptics into buying action in the near term.
Yesterday’s U.S Banking Holiday Should be Considered Regarding USD/MXN Results
The fact that U.S financial institutions were closed yesterday should be taken into account by technical and fundamental USD/MXN traders today and tomorrow. Yes, after rather surprisingly stubborn inflation reports from the U.S. last week, and achieving a high of nearly 18.75000 on Wednesday the USD/MXN did start to track lower – with reversals upward still being seen occasionally but incrementally lower. On Friday the high of the currency pair touched around 18.67630.
However, there is no denying the USD/MXN has continued to battle to new depths. Yet the return of U.S financial houses to the Forex market today could cause more buying action of the USD/MXN if large traders feel the currency pair has been oversold in the past two days.
- Thursday will see the release of the U.S Gross Domestic Product numbers, if growth proves stronger than anticipated this could cause USD/MXN buying.
- With the return of U.S. investment houses following yesterday’s holiday, Forex may see some price action that has not been factored into the USD/MXN the past day.
- Traders should monitor the USD/MXN in the coming hours today to get a feel for behavioral sentiment and watch technical support and resistance levels carefully for sudden choppiness.
Lower depths of USD/MXN cannot be argued against
The bearish trend of the USD/MXN has been strong and it would be unwise to look for a strong and long-lasting reversal higher to suddenly develop. However, while trading at its lowest depths in three years, skeptics may want to wager on slight reversals higher to take advantage of show-term technical nervousness. If the USD/MXN traverses lower and below the 18.36000 level today, sellers of the currency pair could aim for another retest of lows seen yesterday near the 18.33050 mark.
USD/MXN Short-Term Outlook:
Current Resistance: 18.41400
Current Support: 18.37100
High Target: 18.47600
Low Target: 18.32200