If the USD/MXN were to break below the 18.00000 mark and sustain trading beneath this depth, this would be a sign the currency pair has lower territory to roam.
The USD/MXN has turned lower in the past handful of hours; this comes on the heels of a reversal higher yesterday which correlated to the broad Forex market. However, the move lower in recent hours by the USD/MXN continues to exhibit clear signs that the currency pair remains within a rather strong bearish trend. The USD/MXN is hovering near the crucial 18.01150 level as of this writing and it should be monitored closely as behavioral sentiment is tested.
Speculators need to acknowledge there are no one-way avenues in trading. This is not just a mantra, but it is a reminder to stay realistic regarding the dangers of reversals taking place in Forex. While the USD/MXN did trade lower yesterday building on selling momentum seen late last week in the currency pair, a sudden move higher developed. The USD/MXN did touch a high of nearly 18.15500 yesterday. But, yes, the currency pair then began to resume its drive lower.
The 18.00000 mark in the USD/MXN has been a glaring road sign in recent trading. Psychologically technical and fundament traders both have to deal with this rather important value which is proving to be a magnet for the USD/MXN. Yesterday’s low in the currency pair did challenge the 17.914000 mark briefly upon opening, this beat lows seen on Friday when the USD/MXN traded near the 17.97000 ratios as the day finished.
- The USD/MXN is likely to move based on behavioral sentiment generated by the global financial markets near-term which are nervous because of a lack of clarity.
- Concerns still exist the U.S. Federal Reserve will raise interest rates in early May, and also in June, but inflation data from the U.S. remains a loud debate among analysts.
The inability of the USD/MXN to break through higher resistance yesterday during its sudden reversal upwards indicates selling pressure remains strong. There are no guarantees the USD/MXN is going to continue its fight downward, but its rather long-term bearish trend is hard to argue against. The 18.00000 level should be watched today and tomorrow.
If the USD/MXN were to break below the 18.00000 mark and sustain trading beneath this depth, this would be a sign the currency pair has lower territory to roam. Traders should remain cautious and use risk management well. Selling the USD/MXN on slightly higher moves and looking for downside price action could prove to be a legitimate wager.
Current Resistance: 18.02180
Current Support: 18.00925
High Target: 18.08710
Low Target: 17.94300
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