Fresh Lows Seen Again as Support Remains Vulnerable

The USD/MXN begins today’s trading have produced new lows again on Friday before going into the weekend, this as price momentum remains bearish for the currency pair.

Speculators who want to look for reversals higher in the USD/MXN must acknowledge they would be betting against what has become a very strong bearish trend in the currency pair. This past Friday, fresh lows were made which brought the USD/MXN within sight of the 17.00000 level. No, this ratio was not touched, but the 17.01975 mark was challenged briefly.

The U.S. is observing a banking holiday today, so traders of the USD/MXN should understand trading volumes may be lower than normal. However, price velocity the past week continued to exhibit an ability to build onto the downward momentum. On Tuesday of last week, the USD/MXN briefly touched the 17.32200 ratios, but the trend lower in the Forex pair is evident in one week, one month, and longer charts. If a technical trader is using long-term technical prices for clues, the USD/MXN last traded its current values in the early months of 2016.

The success of the Mexican Peso and its incremental moves lower make it one of the best-performing major currencies in the world over the past couple of years. However, day traders need to understand that daily and weekly moves have not been a one-way street, and blindly betting on lower movements from the USD/MXN could prove expensive without solid risk management.

Having challenged the 17.10000 ratio on Wednesday and Thursday last week in the wake of the U.S Federal Reserve’s interest rate pause, the USD/MXN finally broke through and sustained prices below the 17.10000 level on Friday touching a depth slightly below the 17.02000 mark. As of this writing the USD/MXN is near the 17.06900 vicinity and short-term traders should watch resistance up above near the 17.08000 to 17.09000 levels to see if they can be maintained. Betting on quick-hitting results for day traders today could prove difficult because of the lack of large volumes due to the U.S Juneteenth holiday. The near-term will be dynamic however as volumes return to normal tomorrow.

• The 17.00000 is a likely target in the minds of speculators, but it may prove to be too ambitious for traders without deep pockets to pursue. Realistic targets should be used.
• Short-term trading could prove choppy in the current price range today; traders should be using take profit orders and not looking for a dramatic drop in value from the USD/MXN.

Current Resistance: 17.09100

Current Support: 17.04600

High Target: 17.11700

Low Target: 17.0210

Ready to trade our Forex daily forecast? We’ve shortlisted the best currency trading platforms in the industry for you.