The USD/MXN ranks among the most intriguing major currency pairs for traders to wager on because of its rather contradictory results for nearly a year.
As of this writing the USD/MXN currency pair is near the 20.25000 vicinity after having demonstrated a solid day of selling last Friday before going into the weekend. Yesterday’s trading provided what can be term as a consolidated range near important support ratios which were last tested in late July. The last time the USD/MXN traded below the 20.20000 with sustained results was in the month of June.
While short term traders may not want to think about results from June, when the USD/MXN was trading near lows of almost 19.85000 on the 24th of June and even lower earlier in the month it could prove important. These prices are noted because it shows just how strong the Mexican Peso has been compared to many of the other major currencies against the USD. While the USD has powered to new highs against the likes of the EUR, JPY, GBP and others over the long term, the USD/MXN has actually produced a rather strong proving ground for sellers frequently.
Latin American currencies can give great price movements.Trade them with our featured broker.
Inflation Concerns will Spark the USD/MXN today via Consumer Price Data
The reason the USD/MXN currency pair has remained a rather bearish wager is because of energy prices. International demand for Crude Oil helps keep the Mexican Peso strong because Mexico is a large exporter of energy. Support levels near the 20.20000 level should be monitored closely today and will be affected by behavioral sentiment from financial houses because of U.S inflation data.
If the U.S CPI data comes in stronger than expected today, this could spur on short term buying momentum in the USD/MXN.Traders should be prepared for rapid fire trading later today and have risk management in order; spikes should be expected depending on the outcome of the U.S inflation numbers.
Fast Conditions and Whipsaw Results will likely be Demonstrated Momentarily Today
Speculators who enjoy dynamic wagering and have steel stomachs may want to pursue the USD/MXN today. Lightning quick results will likely be produced upon the publication of the Consumer Price Index numbers, if the results are stronger than expected the USD/MXN could see a bounce higher from current support levels. Traders certainly need to be ready for what are almost guaranteed to become rather fast conditions.
If the inflation data comes in higher than expected it could ignite buying of the USD/MXN for a while until a ‘new’ equilibrium is found. However, if the inflation numbers meet expectations, this could actually spur on additional selling of the USD/MXN which could test support levels near the 20.16000 to the 20.10000 vicinity with sudden bursts of power. Technical traders will have their short term skill sets tested today and risk management will be essential.
USD/MXN Short-Term Outlook
Current Resistance: 20.30900
Current Support: 20.20150
High Target: 20.49800
Low Target: 20.15300
Ready to trade our daily Forex forecast? Here’s a list of some of the best Forex trading platforms to check out.