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Traders should expect volatility in the short and near term as the price range of the USD/MXN gets tested, but a sustained move lower in the currency pair today and tomorrow seems unlikely.
The USD/MXN is trading near the 17.44500 mark as of this writing and the currency pair has seen a rather volatile range exhibited and maintained the past two weeks of trading. Bearish speculators who have insisted on pursuing downward momentum in the USD/MXN have likely had their patience and account balances tested the past handful of days.
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The USD/MXN is sitting within the higher elements of its price range when a monthly chart is examined. And traders no doubt largely have gotten use to the seemingly endless potential of the USD/MXN to trade lower. However, the past handful of weeks have proven volatile and uncomfortable because the trend in the USD/MXN has become choppy which is testing the emotions of speculators.
A high of nearly 17.81700 was hit this past Wednesday in the USD/MXN, but then a reversal lower did begin to occur which also happened to correlate with the broad Forex market. By Friday the USD/MXN had hit a low of 17.35075, but since then the currency pair has stabilized and displayed some upwards momentum once again. Pursuit of the USD/MXN lower and the hope that the currency pair is going to re-establish its lower value trend near the 17.10000 to 16.95000 levels in the near term may be wishful thinking for bearish speculators.
Yes, the price of Crude Oil remains high and over the 90.00 USD level per barrel, but the elevated value of the commodity has not helped the Mexican Peso gain in recent trading. Financial institutions are focused on the U.S. Federal Reserve and the belief the U.S. central bank is going to raise interest rates again in November. This is causing broad market nervousness.
While the GDP numbers from the U.S. were slightly lower than expected, growth continues to show it is being maintained in the U.S. economy. Important U. data is coming late this week which will keep financial institutions nervous and the USD/MXN perhaps rather choppy in the short term.
- Jobs and inflation numbers will be published in the U.S this Friday via the Non-Farm Employment Change and Average Hourly Earnings reports.
- Short-term support near the 17.40000 level should be monitored in the USD/MXN.
If current support is maintained in the short-term, speculators should take that as a potential signal financial houses remain cautious regarding their outlooks for the USD/MXN in the near term and are awaiting the results of the U.S. data this Friday. Traders should expect volatility in the short and near term as the price range of the USD/MXN gets tested, but a sustained move lower in the currency pair today and tomorrow seems unlikely.
Current Resistance: 17.47800
Current Support: 17.42250
High Target: 17.54400
Low Target: 17.38700
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