The USD/MXN is trading within a higher range as risk adverse sentiment shadows the forex pair and nervous conditions dominate.
The USD/MXN has experienced a broad range early this morning as forex responds to the rampant nervousness being expressed in the global markets. The result of the US election is unclear and the potential for a decisive outcome may prove difficult statistically until key states have their mail-in votes counted. The lack of clarity will make investment houses extremely skittish and this sentiment will certainly effect the USD/MXN short term.
Speculators may be tempted to enter the fray based on the belief the USD/MXN has been overbought and resistance which has been battered will start to prove adequate. However, to pursue selling positions of the USD/MXN traders will need strong emotional fortitude as dynamic news developments threaten to cause sudden reactions in the marketplace.
The short term range of the USD/MXN may prove to be wide and speculators will have to acknowledge the price band of the Mexican peso may prove dangerous. Traders should use a conservative amount of leverage when participating in the markets today unless they believe their perceptions are absolutely correct, and even if they are, traders should also use stop losses to guard against the dangers of unexpected factors emerging which have not been accounted.
The USD/MXN has enjoyed a fairly solid bearish trend since late September, but the last week of trading has certainly proven that risk adverse conditions are having an effect on the forex pair. Speculators may believe the buying of the USD/MXN has been overdone, and in order to enter selling positions traders may want to consider using limit orders which take advantage of short term trends which they believe upside momentum has been too exuberant. The level of 21.80000 may look like an attractive area to attempt shorting the USD/MXN, but speculators need to keep in mind nervous sentiment may continue to pervade forex and create higher resistance levels which may be tested if dynamic trading conditions persist.
Selling the USD/MXN appears to be the logical decision for speculators short term, but because the US election results are still be calculated trading is certain to be wild within forex. Traders need to account for the possibility that price ranges could remain broad the remainder of the day. Apparent calm waters may become quite turbulent short term and it will be important for speculators to remain alert.
Mexican Peso Short Term Outlook:
Current Resistance: 22.00000
Current Support: 21.35000
High Target: 22.19000
Low Target: 20.95000