USD/MXN Analysis Today – 07.08.: Lower, Quiet Action (Chart)

USD/MXN began this week at the bottom of its short-term price range, which it broke out of last Friday.

• The USD/MXN currency pair is trading close to 18.07400 at the time of writing, the lowest level of its value that was challenged before the weekend.
• The USD/MXN has shown its ability to hold the lower part of its range so far this week.
• The currency pair hit a low of nearly 18.00000 on Friday, last seen on June 25.

The peak for USD/MXN last week was around 18.49327 last Tuesday. The ability of USD/MXN to trade lower despite the absence of US financial institutions due to Independence Day can be seen as a potential bearish signal. Trading houses that were nervous about Mexican domestic politics have likely calmed down a bit. On Wednesday last week, USD/MXN touched the 18.12000 area. Just on Friday, USD/MXN experienced temporary upside volatility, which may have been due to nervousness surrounding the release of the US jobs report.

USD/MXN downward movement fascinating

After going through a difficult uptrend since June 3, the USD/MXN pair may finally be starting to ease the nervousness that pushed the pair to the 19.00000 mark on June 11. The USD/MXN pair’s downtrend may now be targeting the 18.00000 mark. Speculators should not be too aggressive in pursuing USD/MXN and use limited leverage if their price targets require a strong downside move.

The USD was weaker in forex trading and USD/MXN correlated well with this dovish sentiment. However, the absence of US traders last week opens up the possibility for more volume today and tomorrow, which could test existing sentiment. However, last week’s relatively weak US economic data, as well as the employment numbers viewed with suspicion by many analysts, have certainly led to some USD selling.

USD/MXN: Upcoming stimulus from Powell and inflation data

While the USD/MXN rate has been trending lower and seems rather calm at the moment, there is now some momentum for the currency pair. US Federal Reserve Chairman Powell will address the Senate tomorrow and the US House of Representatives on Wednesday. Powell will certainly be asked for his thoughts on US interest rates. Also, the Consumer Price Index statistics will be released on Thursday, which will certainly be something to keep an eye on.

• The USD/MXN rate is likely to continue to decline slightly today, but its price range may prove cautious as financial institutions await Jerome Powell’s remarks.
• The USD/MXN range between 18.01100 and 18.09100 looks intriguing today.

USD/MXN Short-term Outlook:

Current resistance: 18.08200

Current support: 18.06300

High target: 18.10950

Low target: 18.01200

Ready to trade our daily forex analysis and forecasts? Here are the best forex brokers in Mexico to choose from.