The stronger values attained by the Mexican Peso early last week have taken a hit as concerns regarding coronavirus in Mexico escalate again.
The USD/MXN forex pair has seen a flurry of US Dollar buying the past couple of trading sessions. The Mexican Peso is now testing vital resistance at the 23.0000 level and higher as speculators ponder sentiment regarding escalating concerns about coronavirus in Mexico and elsewhere. The current value of the Mexican Peso is testing ground from around the 20th of May and if a further breakdown of value continues resistance levels could prove vulnerable and volatile for speculators.
Statistics from Mexico show a rather alarming increase in new infections of coronavirus being reported much like its neighbor to the north, the United States. The value of the USD/MXN began taking a hit late last week with buyers of the US Dollar emerging. The strong buying of the USD/MXN saw it brush aside resistance around the 22.8000 juncture rather easily.
After a solid month of trading in June which largely was between the 21.6000 and 22.7000 levels, the USD/MXN is testing weaker values which clearly indicate a rising sense of poor sentiment. Resistance levels from May if tested could prove enticing for short term speculators, and levels of 23.1750 to 23.2600 appear to be realistic targets for buyers entering the forex market at its current values.
The USD/MXN always delivers traders an opportunity to test ranges, but current risk sentiment and technical indications suggest buying the US Dollar short term may prove the more reasonable speculative opportunity. If a trader believes a reversal is in the cards and selling the USD/MXN forex pair is worthwhile they may want to wait until they see resistance levels prove stable enough to dip their toes into the water around the 23.1000 juncture.
As the week begins traders should watch trading on global equity indices, but they should also keep their ears pinned to developing news regarding coronavirus in Mexico because short term sentiment will be affected by the developing statistics. Risk appetite is fragile and if sentiment in the global markets demonstrates short term concerns about domestic economies are legitimate, the USD/MXN may continue to attract buyers.
Mexican Peso Short Term Outlook:
Current Resistance: 23.1750
Current Support: 22.5000
High Target: 23.2600
Low Target: 22.4000