#USDMXN @ 18.1396 is aiming aggressively higher on Fed Chair Powell’s comments. (Pivot Orderbook analysis)

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• USD/MXN is aiming aggressively higher on Fed Chair Powell’s comments.
• Federal Reserve Chair Jerome Powell added that the pace of rate hikes could increase based on incoming data.
• USD/MXN Price Analysis: Begins to approach the 20-day EMA at 18.3533.

The pair currently trades last at 18.1396.

The previous day high was 18.0394 while the previous day low was 17.9495. The daily 38.2% Fib levels comes at 18.0051, expected to provide support. Similarly, the daily 61.8% fib level is at 17.9839, expected to provide support.

The Mexican Peso (MXN) weakened sharply on hawkish remarks by the US Federal Reserve (Fed) Chair Jerome Powell has opened the door for a “faster pace” of rate hikes, which strengthened the US Dollar (USD). Therefore, the USD/MXN is surging more than 0.97%, climbing from daily lows of 17.9664. At the time of writing, the USD/MXN pair is trading at 18.1432, volatile, in the North American session.

In an appearance at the United States (US) Congress, Fed Chair Jerome Powell commented that the Fed will have to increase rates more and faster. He also said, “The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated.”

Powell stated that even though inflation is moderating, “the process of getting inflation back down to 2% has a long way to go and is likely to be bumpy.” On its Q&A with US Senators, Chair Powell commented that core inflation has not come down as fast as hoped and emphasized that it has “a long way to go.”

The US Dollar Index (DXY), which tracks the greenback’s value against a basket of six currencies, is climbing 0.70%, up at 105.023. At the same time, the US 10-year Treasury bond yield reached a high of 4.005% before retreating to current levels at 3.960%.

The docket featured consumer confidence on the Mexican front, which improved from 44.3 to 44.8 in February. The same report highlighted that the financial situation for households has deteriorated to 56.1, while consumers commented that they are more likely to make large purchases.

As of writing, the USD/MXN is forming a morning star candle pattern, further cementing the case that the USD/MXN could have bottomed around the $17.90 area. The USD/MXN has jumped to fresh three-day highs above March’s 3 high of 18.1208 while the Fed Chair Powells Q&A is underway.

Although in bearish territory, the Relative Strength Index (RSI) is surging toward the 50-mid line, showing that buying pressure is increasing. In addition, the Rate of Change (RoC), from being negative, shifted gears and portrays that bulls are gathering momentum, so further upside in the near term is warranted.

The USD/MXN first resistance would be the MTD high at 18.3296. A breach of the latter will expose the 20-day Exponential Moving Average (EMA) at 18.3556, followed by 18.5000, which, once cleared, would pave the way toward the 100-day EMA At 18.6975.

Technical Levels: Supports and Resistances

USDMXN currently trading at 18.1716 at the time of writing. Pair opened at 18.0073 and is trading with a change of 0.91 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 18.4356, 50 SMA 18.7851, 100 SMA @ 19.1949 and 200 SMA @ 19.6738.

The previous day high was 18.0394 while the previous day low was 17.9495. The daily 38.2% Fib levels comes at 18.0051, expected to provide support. Similarly, the daily 61.8% fib level is at 17.9839, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 17.9581, 17.9088, 17.8682
• Pivot resistance is noted at 18.048, 18.0887, 18.1379

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