The tranquil price range of the USD/MXN was shattered on Friday as nervous conditions were caused by a disagreement in the U.S White House with Ukraine, but now tariffs loom again for Mexico and more nervousness can be expected.
Never a dull moment is not a friendly thought for most financial institutions. The USD/MXN unfortunately remains under a shadow of questions. While the past few weeks for the currency pair have been able to turn in a rather quiet price range, this was shattered on Friday when President Trump and President Zelensky had a public argument in the White House. The USD/MXN went to a high of nearly 20.65000 in the wake of global Forex reacting, this value had last been seen on the 13th of February. The USD/MXN essentially jumped on Friday from the 20.39000 vicinity to its highs.
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While financial institutions have plenty of their plates to consider because of the U.S and Ukraine negotiations, traders of the USD/MXN are about to be hit by additional impetus. U.S tariffs via the Trump administration are set to begin tomorrow, unless Trump backs down from this threats once again. Let’s remember tariffs were threatened for the 3rd of February and caused spikes higher in the USD/MXN towards the 21.30000 ratio.
Optimism Doesn’t Mean All is Good
Day traders are advised strongly not to participate in the USD/MXN in the near-term unless they feel they are prepared via risk management and understand the electric nature the currency pair could experience. Trying to predict the outcome of the dialogue between the White House and Mexico is extremely difficult.
The USD/MXN is traversing a rather good natured ratio near the 20.48200 mark at this moment. The currency pair has shown the ability to return to more optimistic lower realms. But the near-term lower values cannot hide the fact the USD/MXN remains in elevated territory over the mid-term. And traders looking for quick hitting speculative bets should be ready for sudden rhetoric today and tomorrow which can cause storms.
Betting on the USD/MXN Near-Term
If the Trump White House signals that they are close to finding a negotiated resolution with Mexico today, that would certainly help the USD/MXN find bearish momentum lower. However, if the White House increases noise regarding tariffs being sanctioned tomorrow this will cause the USD/MXN to move higher.
- Traders tempted to believe the worst of the tariff rhetoric has been factored into the USD/MXN may be wrong.
- Early Forex results in February showed the heights the USD/MXN is capable of when nervousness mounts.
- Traders should brace near-term for fast trading in the USD/MXN and uncertain results. Risk management today and tomorrow is an absolute necessity.
USD/MXN Short Term Outlook:
Current Resistance: 20.50100
Current Support: 20.48600
High Target: 20.56800
Low Target: 20.42300
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