After seeing upwards volatility spark early on Friday and testing the 17.56200 vicinity briefly, the USD/MXN has displayed the ability to move back into a rather strong bearish stance. As of this writing without a lot of price action the USD/MXN is traversing the 1.25500 area with a wide spread being seen as full volume awaits the North American marketplace to open.
Certainly the USD/MXN has faced rather choppy territorial fights the past two weeks, which correlates to the broad Forex market quite well, and the Mexican Peso has also retained its rather strong sentiment. USD weak centric attitudes continue to be seen and the USD/MXN is traversing slightly above its lowest levels hit in late January.
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Nervous Sentiment as Financial Institutions Remain Cautious
Major currencies continue to gyrate rather remarkably against the USD, including the Mexican Peso. But the ability of the USD/MXN to reestablish its lower realms will likely spark an investigative attitude by speculators who believe another leg downwards may occur. In late January the USD/MXN did move along the 17.12000 to 17.25000 realms – this from the 27th until the 29th. Perhaps the lower elements may be looked as oversold by many traders, but it also may be a clue into the thinking of financial institutions regarding outlook.
Important U.S data will be released this week. Tomorrow Retail Sales data is on the schedule, this will get some attention but not cement the momentum of the USD/MXN. On Wednesday the U.S jobs numbers will be released and this will certainly create some havoc, but again financial institutions may not be convinced by its results regardless of the statistics. However, on Friday the CPI numbers will be reported, and Forex traders of the USD/MXN will react to the inflation reports.
Outcome of Reports and Wagering on the USD/MXN
These coming reports and their order will set the table for potentially choppy results in the short and near-term, with Friday’s session setting up to be a confirmation of sentiment depending on how financial institutions react.
- Some large traders may believe inflation numbers will meet expectations or even come in better than anticipated.
- If they practice what they preach and lean into tame inflation numbers, this may mean that selling pressure will remain an desired attitude in the coming days.
- Day traders who are looking for lower trajectory in the USD/MXN may believe the same thing, but this is certainly a wager and there are no guarantees that this is how the inflation statistics and impact will ultimately unfold.
USD/MXN Short Term Outlook:
Current Resistance: 17.25670
Current Support: 17.25275
High Target: 17.29200
Low Target: 17.21100