#USDMXN @ 18.4171 Mexican peso loses momentum versus US Dollar after hitting fresh multi-year highs. (Pivot Orderbook analysis)

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• Mexican peso loses momentum versus US Dollar after hitting fresh multi-year highs.
• Dollar advances as Wall Street trims gains.
• Inflations eases modestly in Mexico, Banxico’s minutes point to a smaller rate hike.

The pair currently trades last at 18.4171.

The previous day high was 18.4804 while the previous day low was 18.3209. The daily 38.2% Fib levels comes at 18.3819, expected to provide support. Similarly, the daily 61.8% fib level is at 18.4195, expected to provide resistance.

The USD/MXN is trading at daily highs at 18.42, up for the day. Earlier, it bottomed at 18.30, the lowest level since April 2018. The rebound took place amid a stronger US Dollar across the board and amid a bearish reversal in US stock markets.

The greenback strengthened following US economic data that included a new revision of Q4 GDP, a decline in jobless claims and a rebound in the Chicago Activity Index.

The USD/MXN is rebounding after testing levels under 18.30. The mentioned level is critical and a consolidation below would point to further weakness. If the current correction extends, it would face resistance at the 18.50 area. A recovery above would add support for an extension toward 18.68.

The Bank of Mexico released the minutes from its latest Board meeting held on February 9. They surprised the market with a 50 basis points rate hike against expectations of a 25 bps hike. The minutes showed board members considered rate hikes could rise more moderately at the next meeting due on March 30.

The end of the rate hike cycle looks near but inflation is still far from Banxico’s 3% target. Data released on Thursday showed inflation decelerated more than expected during the first half of February. The annual rate dropped from 7.94% to 7.76%, while the core index reached 8.38%.

Technical Levels: Supports and Resistances

USDMXN currently trading at 18.371 at the time of writing. Pair opened at 18.3745 and is trading with a change of -0.02 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 18.6809, 50 SMA 19.0134, 100 SMA @ 19.3411 and 200 SMA @ 19.7368.

The previous day high was 18.4804 while the previous day low was 18.3209. The daily 38.2% Fib levels comes at 18.3819, expected to provide support. Similarly, the daily 61.8% fib level is at 18.4195, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 18.3035, 18.2325, 18.144
• Pivot resistance is noted at 18.463, 18.5515, 18.6225

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