USD/MXN Analysis Today - 22/07: Key Level Tested (Chart)
Date
7/23/2024 11:23:17 PM
(MENAFN- Daily Forex) Nervous trading has been seen in the USD/MXN early today as financial institutions are reacting to potential affects on the USD due to President Biden's decision not to run for re-election.
As of this writing the USD/MXN pair is near the 17.99250 realm with rather fast trading being demonstrated. Global financial institutions are likely burning off nervousness as they react to the decision of President Joe Biden not to run for re-election this coming November. Forex has seen some slight USD buying as risk appetite has turned slightly cautious. However, after hitting a high of nearly 18.06330 early today, the USD/MXN has sold off a bit.
The early morning jump in the USD/MXN has not been the most unexpected circumstance due to nervousness being seen in the broad financial markets. Yet, financial institutions have been braced for the potential of Biden to step aside in the next election, this after his poor debate performance and questions about his ability to govern effectively for another four years. The USD/MXN remains around the key psychological level of 18.00000 and this will get the attention of speculators.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money Recent Move Higher in the USD/MXN Not Only Due to Biden
Before a false narrative is created about the influence of the Biden decision on the USD/MXN it should be noted the currency pair started to traverse higher on Thursday the 18th of July. The USD/MXN was trading near the 17.70000 ratio since early last week with a rather tight price realm being tested. The sudden move higher on Thursday and ability to sustain higher values on Friday was intriguing and suggest some nervousness in financial institutions was brewing that had nothing to do with Biden.
Speculators may feel the 18.00000 mark remains an overbought price level for the USD/MXN, but they should be cautious against selling with targets that are too ambitious downward. It is possible in the short and near-term questions arising about U.S politics may factor into existing sentiment. And it should be noted important economic data will come from the U.S this week, climaxing on Thursday and Friday with the Gross Domestic Product numbers on the 25th, and PCE inflation figures on the 26th/MXN Speculative Notions and Risk Management
President-elect Sheinbaum of Mexico did appoint known officials of the current administration as ministers for government which takes power in October late last week. Financial institutions seem to be cautiously optimistic about their outlooks for Mexico but clearly, they are also cautious.
Speculators who have been used to wagering on bearish perspectives regarding the USD/MXN over the long term are now coming to the realization the currency pair is likely going to remain in a higher price realm. Tests for downside price action may be tempting but should be done so with a cautious framework. The question about where equilibrium will be found, and how financial institutions will pursue support and resistance levels still needs to be figured out for the mid-term, and because of this the short-term will likely remain choppy.
USD/MXN Short Term Outlook:
Current Resistance: 18.02600
Current Support: 17.97100
High Target: 18.07300
Low Target: 17.94560
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