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On Friday of last week the USD/MXN moved to a low of nearly 17.02900. The currency pair is trading near the 17.04050 ratio early this morning, but speculators need to understand that a U.S banking holiday is being celebrated and Forex volumes globally are very light. The ability however of the USD/MXN to continue pressing up against perceived mid-term support is intriguing, particularly as the broad Forex market remains rather nervous about outlook over the near-term.
U.S inflation reports caused bedlam in Forex last week, the USD/MXN shot up to a high of nearly 17.22900 on Tuesday in the wake of the higher than anticipated U.S CPI results. The USD/MXN then started to incrementally trade lower however, the currency pair did correlate with the broad Forex market . Yet the strength of the bearish trend in the USD/MXN continues to standout when compared to other major Forex pairs teamed against the USD over the long-term 17.00000 as a Target in the USD/MXN
It may be too easy to look at a level like the 17.0000 mark in the USD/MXN and proclaim its importance. However technical traders should be quite happy to look at charts consisting from one to six month timeframes and see that the 17.00000 has become a battleground. Intriguingly on Friday of last week the U.S released another inflation report via the PPI and it also came in higher than expected.
While the USD/MXN did climb briefly like the broad Forex market on Friday because of the higher Producer Price Index numbers and toyed with the 17.10000 level, the return to bearish traction cannot be denied. After attaining the lows for the week as Friday proceeded, the USD/MXN has remained within sight of the 17.0000 target. Yet today's light trading volumes in the broad Forex market are likely to keep the currency pair relatively tranquil in the short-term.
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USD/MXN traders likely know the currency pair has been within a long-term bearish trend, but the past handful of months have seen the 17.00000 level become a rather central focus for financial institutions. Traders should be careful today because of the light volumes, and upon tomorrow's Forex price action it will prove quite interesting to watch the USD/MXN. While many may remain bearish regarding the trajectory of the currency pair, it may prove wised to pursue quick hitting trades in the currency pair in the near-term.
The short-term range of the USD/MXN is likely to see a testing ground between 17.01900 and 17.05900 due to holiday trading. Speculators should use entry price, stop loss and take profit orders carefully today if they insist on wagering.
USD/MXN Short Term Outlook:
Current Resistance: 17.04300
Current Support: 17.03100
High Target: 17.05900
Low Target: 17.01900
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