USD/MXN: Near Term Highs are challenged as Nervousness Grows – 29 August 2022
The USD/MXN is trading near important resistance as speculators consider rather intriguing technical potentials.
On the 19th of August the USD/MXN was trading near the 20.27000 ratio which essentially came within sight of resistance, with higher marks achieved in the first week of August. By the 25th of August the USD/MXN had produced a selloff which returned the forex pair to its lower values as the mark of 19.85000 was tested.
But as speculators know, the end of last week witnessed U.S Fed Chairman Powell outline his thoughts for more interest rate hikes to come, and the USD/MXN turned higher with a relatively swift momentum. As of this morning the USD/MXN is traversing important near term resistance and is currently trading near the 20.12700 level. Technical traders are likely eyeing the 20.13500 area as a place to make a decision about potentially stronger buying to occur which could target the marks seen one week ago.
Range has been Strong and may continue to Produce Opportunities in the USD/MXN
Yes, the USD/MXN reflected the broad Forex results as the USD got stronger this past Friday. Technical traders may be inclined to believe that the USD/MXN has produced a rather intriguing price range the past few months and look at its results and wonder if the higher price momentum can be sustained. In July the USD/MXN traded momentarily above the 21.00000 level. As recently as the 2nd of August the USD/MXN was near the 20.81000 ratio.
August’s Tranquility is Likely to become a Rather Distant Memory Soon in the USD/MXN
Nervous behavioral sentiment appears to be growing, and this week may produce additional choppy trading as financial houses brace for the end of summer and renewed questions about the global economic outlook. Yes the price of Crude Oil within its higher price range if maintained is likely to serve as a solid anchor of value for the Mexican Peso, but questions about the U.S Federal Reserve and its interest rate will rock the boat.
The potential for a higher move with the USD/MXN should be considered if current near term resistance around the 20.140000 is broken higher and sustained.Traders should be prepared for choppy conditions if technical reactions to higher moves are generated.
The USD/MXN could find itself testing a higher range from 20.20000 to 20.40000 if buying momentum flourishes in the coming days. Trading may prove to be nervous in the coming days as speculators adjust their decisions to financial houses which seek equilibrium. Risk management will be crucial in the short term. If a trader buys on lower price action near current support around the 20.10000 mark and looks for quick hitting upside wagers they cannot be blamed short term.
USD/MXN Short Term Outlook:
Current Resistance: 20.16400
Current Support: 20.09800
High Target: 20.34000
Low Target: 19.98700
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