(MENAFN- Daily Forex) The USD/MXN is trading near the 17.16450 level as of this writing, which is a low that had last been seen technically on the 22nd of September. On Tuesday of last week, the USD/MXN was being traded around the 17.63100 vicinity. Upon the release of the U.S. inflation numbers via the Consumer Price Index, the USD/MXN followed in the footsteps of many major currency pairs teamed against the USD and experienced a strong selloff.
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A low within the 17.33385 vicinity was seen in the USD/MXN on Tuesday of last week, but a curious thing followed this low. Unlike many other major currency pairs, the USD/MXN continued to incrementally test new lows in the coming days, and by Friday the Forex pair was below the 17.20000 level. The sustained move lower in the USD/MXN without producing a volatile reversal upwards is noteworthy and highlights the strength the Mexican Peso has shown rather consistently over the long term Momentum in the USD/MXN has come to a Halt Momentarily
Yes, in early October the USD/MXN had climbed to within sight of 18.50000, then experienced choppy trading most of the month until another high on the 26th of October near the 18.43700 vicinity was tested. However, the USD/MXN did fall below 18.00000 on the 1st of November and tested lows near 17.33000 on the 3rd of November. Another bullish move took the USD/MXN to within sight of 17.94000 one week later, but going into last week the ability to remain below 18.0000 had gotten the attention of speculators.
Financial houses dealing with the USD/MXN clearly have been positioning for potential signs the U.S Federal Reserve would be forced to stop being so aggressive regarding their monetary policy, last Tuesday and Wednesday the inflation data made this notion stronger. The selloff in the USD/MXN mirrored the broad Forex market and now equilibrium in the near-term will be sought. The ability of the USD/MXN to continue rather steady selling is intriguing. Bearish traders need to look at three-month charts for perspectives regarding the potential of lower moves Days Ahead for the USD/MXN
However, before traders jump into blind selling positions they need to remain cautious. The near-term may prove to be rather choppy because of the U.S. holiday approaching this Thursday which will curtail trading volumes significantly. Short-term support levels should be targeted as take-profit locations for day traders who need to be conservative regarding their outlooks. Keeping realistic targets will be important in the near term because reversals higher could easily develop.
Support near the 17.15900 level should be monitored. If the 17.16000 is penetrated and prices are sustained below, this could spark additional selling. Realistic targets are highly encouraged for traders today and tomorrow in the USD/MXN. The use of take profit and stop loss orders remains important as always.
USD/MXN Short Term Outlook:
Current Resistance : 17.16400
Current Support: 17.15900
High Target: 17.18700
Low Target: 17.13800
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