#USDMXN @ 18.7890 Mexican Peso among top performers on Friday. (Pivot Orderbook analysis)

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• Mexican Peso among top performers on Friday.
• UUSD/MXN slide found support above 18.70 as DXY strengthens after the beginning of the American session.
• US data mostly in line with expectations on Friday.

The pair currently trades last at 18.7890.

The previous day high was 18.899 while the previous day low was 18.7816. The daily 38.2% Fib levels comes at 18.8541, expected to provide resistance. Similarly, the daily 61.8% fib level is at 18.8264, expected to provide resistance.

The USD/MXN dropped on Friday to 18.71, reaching the lowest level since January 18 and then rebounded, erasing daily losses after the greenback gained momentum following Wall Street’s opening bell.

The dollar remains weak against emerging market currencies as equity and commodity markets rise. The Mexican Peso is outperforming its EM peers on Friday, although it pulled back during the last hour. US yields moved higher during the American session supporting the greenback.

Market participants focus now on next week’s FOMC meeting. The Federal Reserve is seen raising rates by 25 basis points. Data released on Thursday and Friday showed a slowdown in US economy and also in inflation indicators. At the same time, the labor market remains healthy. Next Friday, the Non-farm payroll report is due.

In Mexico, the unemployment rate dropped to a new record low but mostly due to a decline in the labor participation rate. Jobs actually fell by more than 900K, the worst month in years.

On Thursday, the Bank of Mexico will have its board meeting. A 25 basis point rate hike is expected as inflation remains well above the central bank’s target of 3%, plus or minus one percentage point. The half-month inflation in January showed an increase of 0.46%, with the annual rate at 7.94%. Worrying was the annual Core CPI rose from 8.35% to 8.45%.

The USD/MXN is back above the 18.75 area that is a relevant support area. A consolidation below should open the doors to more losses. On the contrary, if the pair moves above 18.90, the US Dollar would strengthen.

The daily chart shows the USD/MXN consolidating near 18.80. The main trend is bearish but if the Peso fails to print new highs in the near term, a recovery of the US Dollar seems likely.

Technical Levels: Supports and Resistances

USDMXN currently trading at 18.7372 at the time of writing. Pair opened at 18.7944 and is trading with a change of -0.3 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 19.0203, 50 SMA 19.3256, 100 SMA @ 19.605 and 200 SMA @ 19.8866.

The previous day high was 18.899 while the previous day low was 18.7816. The daily 38.2% Fib levels comes at 18.8541, expected to provide resistance. Similarly, the daily 61.8% fib level is at 18.8264, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 18.751, 18.7077, 18.6337
• Pivot resistance is noted at 18.8684, 18.9423, 18.9857

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