The USD/MXN continues to show a tendency to trend downwards and is near the 18.59800 ratio as of this writing with fast changes in values, this after going into the weekend with its low for the week and within sight of important support levels.
After the USD/MXN traversed higher in the aftermath of the election results in Mexio last year. Then produced choppiness in the wake of the Trump victory in November and for a handful of months, the USD/MXN has turned in a rather pronounced downwards trend since the second week of April when the 21.00000 level was seeing price action above. As of this morning the USD/MXN is near 18.59800 mark.
No, the USD/MXN has not traded below values seen before the Mexican election results in the early summer of 2024, but the ability to move to depths that will spark interest in financial institutions because of the bearish trend on display is important. Mexico remains rather comfortable with the noise surrounding U.S tariff antics and financial institutions have correlated the USD/MXN to the broad Forex market in a healthy manner.
Mid-Term Lows and Thoughts about Targets Below
In the last week of July the USD/MXN traded below its current values. Day traders who are tempted to look for price action around the 18.56000 to 18.53000 ratios cannot be faulted. Price action in the broad Forex market will focus on U.S inflation data which will be published tomorrow via the Consumer Price Index. If the number meets expectations it will help the USD centric weaker momentum sustain.
Financial institutions believe the Federal Reserve will have to cut the Federal Funds Rate in September based on the weaker than expected U.S jobs numbers that were printed on the 1st of August. The USD/MXN is now challenging an important support level and if the 18.55000 level is flirted with this will be important. A mark below the 18.50000 level in the USD/MXN would be a sign that financial institutions feel comfortable with mid-term outlooks, but importantly we have not reached that accomplishment.
USD/MXN and Short-Term Contemplation
The trend of the USD weaker price action has been noteworthy the past handful of days. The USD/MXN went into the weekend testing important lows. If the broad Forex market remains in a weaker USD stance the USD/MXN is likely going to see more selling.
- However, in the short-term (today) the USD/MXN may face some headwinds from large players who want to wait until confirmation from U.S inflation data tomorrow before making another move that could stir Forex.
- Choppiness may prevail over the short-term as financial institution position for possible outcomes tomorrow.
- Day traders as always face the greatest danger of volatility via the movements in the USD/MXN because of leverage.
USD/MXN Short Term Outlook:
Current Resistance: 18.60040
Current Support: 18.57020
High Target: 18.63200
Low Target: 18.54100
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