Having gone into the weekend near the 17.28300 mark the USD/MXN was exhibiting its lower realm. On the 27th of February the USD/MXN was around the 17.23300 mark before the Iranian war ignited. The USD/MXN reached a height of 18.16200 on the 31st of March. Last Tuesday before the announcement of the Iranian ceasefire the USD/MXN was around 17.95850, by Wednesday lows around the 17.35500 were being tested.
The ability of the USD/MXN to maintain its lower price range at this moment shows some tranquility still remains within financial institutions. But let there be no mistaking that nervousness remains apparent in the broad Forex market. Following this weekend’s inability to reach an agreement between Iran and the U.S global markets have shown some anxiousness this morning.
Calm Move Higher in the USD/MXN
Day traders can certainly look at the move higher in the USD/MXN which has taken place as a calm step above. The USD/MXN remains within the lower realms of its value still. The Mexican Peso has done remarkably well over the long-term and has shown a sincere bearish ability via the USD/MXN. However, speculators need to remain vigilant regarding current market conditions.
The volatility seen the past handful of weeks has likely not lost its power quite yet. The tranquility being demonstrated at this moment could disappear if the U.S White House rhetoric turns into military action. Some optimists may believe the worst of the noisy headlines have been digested and that more consistent trading conditions will prevail today and the coming days. But what if it doesn’t?
Near-Term Uncertainty in the USD/MXN
Uncertainty is a real characteristic at this time in the global markets. What appears calm for the moment could turn into high levels of risk with a sudden news development. Financial institutions may believe all will turn out well or that things can’t get much worse, but day traders need to remain tactically strong regarding their risk management.
The potential for sudden moves that strike fast exists.
The USD/MXN is within the lower realms of its value. Looking for dynamic price action to occur lower in the short and near-term seems unlikely to develop.
Yes, the USD/MXN could certainly traverse to lower depths, but taking into account the risks that shadow current trading conditions it may prove beneficial to be wary of spikes upwards.
Traders should stay realistic and not aim for overly ambitious price action.
The potential for velocity needs to be given respect, because if military action ignites again in the Iranian war day speculators will get hurt if they have not protected their positions with stop losses and take profit orders.
USD/MXN Short Term Outlook:
Current Resistance: 17.38300
Current Support: 17.37000
High Target: 17.47500
Low Target: 17.35700