Why should you listen to me about the Dollar vs Mexican Peso Technical Outlook: USD/MXN Recovery at Risk? Well, in my opinion, this will determine whether or not you will make money or lose money in the currency market. The most obvious reason why I am making this statement is because I have been taking a long-term view and that is, I started out as a Long Term Trader on the largest Forex market (USD/JPY) and soon after, I took over a small Forex company.
And because I only started out in the Forex market when the dollar was undervalued, I ended up with an opinion which was that the US Dollar was going to recover and then it did. The conclusion was obvious to me. In fact, I shared this news with the mainstream media so that they would not destroy my credibility in the markets.
But because I started out at the beginning of the cycle, my economic views were influenced by USD/MXN recovery at risk. And the truth is, that this is still my political views and if you will not acknowledge my views, then I will not listen to you. Why?
Because I do not believe that the US dollar is undervalued in the USD/MXN area. In fact, I think that the US dollar is undervalued in the FX markets. If you ask me, I feel the US dollar should be valued at a much higher level than it currently is.
So when you look at the USD/MXN sectoral outlook in the USD/MXN sector Outlook Report I have provided, and remember that we are into Year -End Breakout, you will realize that the reasons why I am making this statement is because the USD/MXN segment is pretty much flat in the middle of its recovery from the post-Great Recession lows of March 2020. To be sure, there are some forces that can throw this sector upside and this could mean very good news for the Long Term Traders.
But if you focus only on the value of the MXN and forget about the USD, you are headed for a horrible mistake. The reason I say that is because of the fact that some of the emerging economies are looking like they could join the party before the end of the year and then it is very difficult to say where the USD/MXN sector will end up.
For example, they are all over the charts, the Nifty or Sensex or the NSE or NASDAQ are all over the charts, but Private Equities Analysts will tell you that this will all be wiped out by China and the RMB. Now I think you know the answer to this problem.
OK, back to the question about the USD/MXN sector’s recovery. This is the time to get aggressive in the FX markets, but it is the time to be very careful and have an eye on the opportunity cost of your moves.
For example, if you open a USD/MXN trade with a point spread of four points and go into the field to buy, if you are wrong and the dollar recovers, you will lose four points for one half points for another. If you were smart, you would only trade when the dollar is strong and you would avoid the weaker currency pairs during the weak currency days.
You will see that this is where you should use this line of reasoning in your trading and your attention will shift to the strong support points of the USD/MXN exchange rate. And remember, this is your opportunity to be aggressive with the Forex.
Now, I know you might be worried about the fact that your life may be disrupted in some way because of this, but remember, if you choose to be a long term trader, you are going to have to learn about opportunities and about trading. Trading well is the most important aspect of being a long term trader.
So, if you can take this opportunity and if you can be a great trader, then you will be making some real money in the currency markets. if you are not, then you are doing something wrong in your trading education.