The USD/MXN continues to produce an extremely tight price band and its ability to demonstrate solid support may attract speculators with a taste for adventure.
The USD/MXN as of this writing is below the 19.90000 level, and the Forex pair has exhibited an extremely tight price range since the 3rd of September. The USD/MXN is demonstrating a very resilient support level too as the 19.84000 juncture continues to prove a place where reversals higher are exhibited. Traders who do not trust the consolidated range of the USD/MXN are likely right to feel anxious.
However, speculators who have been able to take advantage of short-term trades via quick-hitting positions, which seek resistance and support levels that are close by may be finding the waters friendly. In order to take advantage of trades which seek a limited amount of pips upwards or downwards, a trader must use a take profit order which is rather close to the current action after they have opened their trading position. They may also choose to use stop loss ratios which are slightly further away so they are not taken out of positions which are experiencing natural cycles of fractional movement. A cautious amount of leverage should be used when using these tactics.
Technically, support continues to be demonstrated in a fierce manner near the 19.87000 to 19.85000 ratios and if these levels continue to hold, they will then serve as place to enter buying positions while looking for upside price action. Traders who do not want participate in the USD/MXN as it demonstrates such a tight range and want to wait for a trend to emerge may need to be patient. However, the USD/MXN has intriguingly been able to stay below the 20.00000 mark since the 3rd of September rather consistently.
The ability to remain under the key psychological mark of 20.0000 may be a bearish signal, but the 19.84000 mark remains a rather strong support level which has proven durable over the long term. If the 19.80000 level were to suddenly be tested and values below this mark could be demonstrated in a sustained manner it might signal a significant bearish move is about to occur.
Short-term traders may want to stay cautious because global markets via equity indices are showing signs of nervousness. Technically, this may create more foundation for support levels to remain strong near term. Speculators who want to buy the USD/MXN near support levels and look for upside movements in an incremental fashion may be making a wise wager in the meantime.
Mexican Peso Short-Term Outlook
Current Resistance: 19.92000
Current Support: 19.87000
High Target: 20.01000
Low Target: 19.84000