- The euro has gone back and forth during the course of the trading session here on Wednesday against the Mexican peso as we are waiting to see what happens with the European Central Bank.
- All things being equal, most people expect the ECB to cut rates and therefore it should not be a huge surprise when they do.
- Furthermore, we have to pay close attention to the Mexican economy as it is under threat as far as tariffs are concerned coming out of the United States, which would be a huge problem.
Currently, the 21 Mexican peso level underneath is support with the 22.50 pesos level above as resistance. We are sitting right around the 50 day EMA and that of course is an indicator that a lot of people pay attention to as per usual.
Top Regulated Brokers
Buy on the Dip?
So, I think this still remains more or less a buy on the dip scenario because while there are a lot of concerns about Europe, it's not Mexico. And that's I think the big takeaway here. The price action is very similar to the dollar against the Mexican peso. So, what this tells me is, it's the Mexican peso that is the real driver of where we are going. And if it's the Mexican peso, it is going to be the deteriorating Mexican economy, but perhaps more importantly, it's going to be Donald Trump. We are in a wait and see mode when it comes to the peso. I think that will probably continue to be the case. But if you are a short-term trader who likes to range-bound trade, this could very well end up being a very nice opportunity for you if you are nimble enough, and are willing to sit an watch the trade on a short-term basis.
Ready to trade our daily Forex forecast? Here’s a list of some of the top Mexican forex brokers to choose from.