USD/MXN Analysis Today - 03/09: Debate Ups Noise (Chart)
(MENAFN- Daily Forex) The USD/MXN has maintained its surge higher and traders of the currency pair who have been pursuing buying positions have likely seen reasonable profits.
The USD/MXN currency pair while experiencing lower trading volume yesterday because of the U.S holiday, managed to climb to a high of nearly 19.85295 before reversing slightly lower. But as trading started to increase this morning the USD/MXN resumed upwards trajectory and touched a height of almost 19.86815. It also needs to be pointed out the USD/MXN hit the 19.95750 vicinity on Thursday of last week. In other words the currency pair continues to challenge higher ratios and remain volatile. The USD/MXN is near 19.75250 at the time of this writing.
The road higher in the USD/MXN is not a steady avenue and day traders cannot bet blindly on upside. Reversals lower definitely occur, but the consistent track upwards in the USD/MXN since the second week in July is hard to ignore. The USD/MXN has attained this strong move higher as the USD has actually gotten weaker against many other major currencies. Which highlights that something is thought to be wrong in financial institutions, and the problem is clearly the newly elected Mexican government which large traders clearly do not trust. The USD/MXN was trading near the 16.50000 level on the 21st of May.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money Today will Bring More Noise for the USD/MXN
Yesterday's U.S Labor Day celebrations means full volume will return to the USD/MXN today. But the significant factor in the USD/MXN is likely going to be the Mexican government's scheduled debate which will be held today. Many outside observers hope that the proposed judicial reforms which would allow direct voting for judges will be changed, but financial institutions have clearly braced for a stubborn position to be taken by the now stronger populist ruling government of Mexico. If today's debate does not produce any signs of compromise, financial institutions are likely to get more nervous.
The USD/MXN is within sight of the 20.00000, while it has not touched the mark since a surge higher on the 5th of August when global market conditions turned chaotic briefly, the value could be a target again if financial institutions are not happy later today and tomorrow. Day traders should practice caution in the near-term because the USD/MXN is going to remain dangerous to trade.U.S Jobs Numbers Coming on Friday
The notion the USD/MXN has traded in an uncorrelated manner to the USD centric weakness seen in other major currency pairs is important. Also, traders need to know U.S jobs numbers will be published this Friday and if the data is weaker this could help stem the tide of bullish momentum in the USD/MXN briefly.
But the key word is briefly, because financial institutions will remain transfixed on their sentiment being generated via their outlook on the USD/MXN because of internal Mexican politics. The Mexican Peso has lost a substantial amount of value since late May and at some point financial institutions may say 'basta' – enough, but when that is going to happen is a difficult question to answer. Today's debate in Mexico regarding judicial reforms will stir USD/MXN volatility.
USD/MXN Short Term Outlook:
Current Resistance: 19.82000
Current Support: 19.70700
High Target: 19.99900
Low Target: 19.60800
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