USD/MXN Forecast Today-23/01 US Dollar Continues (Video)

2025-01-23 02:20:39

(MENAFN- Daily Forex)

The US dollar continues to bounce around against the Mexican peso. The US dollar initially tried to rally during the trading session on Wednesday, but then gave back some of those gains to show that we are just going to hang around in the middle of the overall range that we have been in, which is defined by 20 Mexican pesos on the bottom and 21 Mexican pesos on the top is worth noting that historically speaking, this has been an area that's been very important going back multiple years. So, it's not a huge surprise to see some reaction here, but at this point, as long as we can stay above the 20 Mexican pesos level, I still favor the upside.

Tariffs Coming?

Keep in mind that the Trump administration is very likely to put tariffs on Mexico. While that is somewhat priced in the market, the reality is that once it actually happens, we'll have to see what the reaction is, since it could be crucial. If we were to break down below the 20 Mexican peso level, it could open up a move down to the 200 day EMA, which is near the 19.4 level, but I don't see that happening without some type of really negative event for the dollar itself. If we break above the 21 Mexican peso level, it could open up a move all the way to 25 pesos, but that would take some time. Expect a lot of volatility in this pair, but quite frankly, I truly believe that Trump is going to punish Mexico for a lot of different things. Eventually, a deal will be worked out, but as things stand right now, it doesn't really look like one is going to happen quickly.

I suspect what will probably have to happen is that the tariffs will have to be levied, the border will have to be closed, and then some type of deal will be put in place. My anticipation is Trump is going to make the Mexicans feel some heat before he lets go, and so long as that's the case, I don't like shorting this pair.

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