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The broad Forex market has delivered a wave of USD centric weakness and the USD/MXN has correlated to the behavioral sentiment. Large players and day traders now have an opportunity to wager on their short and near-term perspectives as the technical landscape in Forex have altered. The past week and half had seen a rather tight consolidated trading range in the USD/MXN with hints of potential to move lower, now that it has happened speculators must determine if there is more downwards price action to come or if support levels will start to play a role.
White House Middle East Push Adds New Layer to USD/MXN Sentiment
While narratives regarding why USD centric strength are still being debated, the results of the Fed’s FOMC announcement are easy to define. The MXN has been stronger and price velocity lower certainly took place. However, after finding a speedy rush downwards from last Wednesday into Thursday, the lower realm has run into slight headwinds. Although the price of the USD/MXN has been sustained, the currency pair can be said to have displayed sideways results the past couple of days.
What makes the USD/MXN ultimately appealing for possible pursuit by day traders today is the impetus delivered from the U.S White House this weekend after another decision by President Trump to pursue an agreement with Iran instead of escalating military action in the Middle East. The coming influx of North American financial institutions in the next few hours will prove worth watching.
Sharp USD/MXN Drop Gives Way to Sideways Trade as Institutions Wait
Trading in the USD/MXN since Wednesday of last week has seen robust selling. The currency pair has marched in step with momentum displayed by major currencies paired against the USD since the U.S Federal Reserve meeting’s outcome. The USD/MXN was near 17.54100 as the Federal Reserve started to have an effect on the broad Forex market. By Thursday the USD/MXN was trading near 17.32200 and showing rather solid intraday volatility, while staying in its lower price realm.
As of this writing the currency pair is near 17.32450 depending on the bids and asks with a wide early spread this morning. In other words, the USD/MXN is trading where it was situated two trading sessions ago. While financial institutions haven’t produced a strong reversal higher as a countermove, the USD/MXN’s low this morning around 1.29900 wasn’t able to hold onto its depths. This slight reversal higher early today suggests that big players are waiting for additional impetus from larger volumes via North American financial institutions as they return from their weekend.
USD/MXN Struggles to Break Lower but Further Selling Still in Play
Dynamic price action in the USD/MXN has certainly been seen by day traders. Another wave of momentum lower now must include an anticipated reaction from greater volume as financial institutions respond to this weekend’s news about the Middle East. Large players have shown a rather cautious attitude in the USD/MXN the past two sessions and into today.
The inability to create more downwards momentum should not stop traders from thinking about the potential of additional selling, but they need to understand that forces coming from greater volume are being waited for and could be a catalyst. The USD/MXN it essentially traversed its current values around the 22nd of June. Intriguingly, before the USD/MXN moved within that territory it had been challenging lower depths in mid-June when the 17.20000 mark was targeted ground.
Institutions Cautious on Deeper USD/MXN Selling Amid Mixed Risk Signals
Financial institutions may be displaying some optimism within the broad Forex market and the USD/MXN may be within its lower trading elements. However, due to the swirling nature of changing rhetoric in the Middle East and a still nervous U.S equities market, the recent sideways price action in the USD/MXN also represents warning. Perhaps signifying that larger players may want more evidence for reasons to sell the USD/MXN within it current price realms, thus opening the door to the potential of pushback and slight reversals taking place until they are convinced.
Upside USD/MXN Reactions Possible While Broader Risk Appetite Develops
The price action from late Thursday into early today shows the USD/MXN certainly within the lower part of its realms, but that caution is delivering technical advantages for those who want to wager only on quick hitting outcomes. This might change in the coming hours. Speculators need to watch barometers like WTI Crude Oil and global equity indices to see how risk appetite operates. Looking for lower momentum needs to be done carefully, because some upside reactions remain possible.
USD/MXN Short‑Term Levels: Support, Resistance and Intraday Targets
Current Resistance: 17.32500
Current Support: 17.32100
High Target: 17.35700
Low Target: 17.29200
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