The USD/MXN is being hit by a wave of heightened price velocity in early trading this morning, as financial institutions continue to react with nervousness regarding broad market conditions.
As of this writing the USD/MXN is trading near highs not seen since early February. Traders are urged to compare present market conditions in Forex to what is being written in this article to gauge if calmer conditions have developed. The USD/MXN is near the 19.22000 ratio for the moment, but by the time I am finished writing this article, it may be vastly different. Just a half hour ago the USD/MXN was near 19.10000 vicinities.
The USD/MXN is challenging mid-term highs as a wave of nervousness is apparently ripping through financial institutions as they search for safe havens. The banking crisis via Credit Suisse and its takeover by UBS late last night has not calmed market conditions. Corporate bonds in the banking sectors are experiencing volatility and this will have an effect on equities today. The USD/MXN is likely getting hit as Forex traders look to the USD as a less risky option to hold possibly.
The USD/MXN is likely to calm down relatively soon, but technical traders trying to monitor the currency pair should be careful and consider fundamental aspects of Forex to this morning. To give you an idea of what the USD/MXN is doing as I write: the currency pair is now near the 19.22000 ratios. The climb upwards has been steady and if a trader is short the USD/MXN in the current conditions they have likely been hurt if stop losses were not being used.
The long-term bearish trend of the USD/MXN has run into a buzz saw since the 9th of March when the currency pair was trading near the 17.90000 mark. Traders who have the opinion the USD/MXN has been overbought since the outbreak of the banking crisis which started a bit more than a week ago may be proven correct at some juncture, but betting on a strong sudden reversal lower could prove extremely dangerous and costly. Financial houses globally appear to be very nervous regarding current market conditions and this will likely continue to foster volatility. Whipsaw results should be expected.
- The U.S. Federal Reserve is set to announce its Federal Funds Rate this Wednesday.
- A lack of clarity is causing worries to increase in Forex, because although the U.S Central Bank may want to hike borrowing by 0.25%, financial houses may react poorly to an increase as the corporate banking sector is getting hit by fragile conditions.
USD/MXN traders are highly encouraged to be conservative today regarding their wagers. The USD/MXN is now trading at nearly 19.08000 as this article is completed, to show you the speed of the Forex pair. Stop losses, take profits and a steady stomach will be needed when speculating today because nervous conditions may linger a while longer.
Current Resistance: 19.21000
Current Support: 19.05000
High Target: 19.29000
Low Target: 18.94000
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