The USDMXN currency pair has experienced an upward trend from 17.10 due to the favorable signals from the USD Index. It is currently trading at 17.1543.

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• USD/MXN has displayed a recovery move from 17.10 following positive cues from the USD Index.

The pair currently trades last at 17.1543.

The previous day high was 17.2555 while the previous day low was 17.1029. The daily 38.2% Fib levels comes at 17.1972, expected to provide resistance. Similarly, the daily 61.8% fib level is at 17.1612, expected to provide resistance.

The USD/MXN pair has shown a recovery move after defending its crucial support of 17.10 in the European session. The asset is following the footprints of the US Dollar Index (DXY) as the latter has also shown a recovery move from 102.00.

S&P500 futures have increased losses in the London session as investors are hoping that recession fears in the United States have not receded despite the Federal Reserve (Fed) has skipped hiking interest rates in June.

The USD Index has rebounded firmly to near 102.23 as two more interest rate hikes have been announced by Fed chair Jerome Powell. Also, Fed Powell confirmed that rate cuts are not appropriate by year-end. The Fed believes that headline inflation has softened due to the gasoline prices impact while the core inflation is still showing persistence.

Apart from that, US labor market conditions are well tight in spite of the Unemployment Rate having increased to 3.8%. The US economy is still operating in a better position beyond full-employment levels and will keep households’ demand at elevated levels.

On Thursday, US Census Bureau reported that monthly Retail Sales (May) surprisingly expanded by 0.3% while the street was anticipating a contraction of 0.1% but the pace of expansion was slow against the prior pace of 0.4%. Scrutiny of the Retail Sales report shows that demand for automobiles was extremely solid though inflationary pressures have squeezed the real income of households.

On the Mexican Peso front, Bank of Mexico (Banxico) Governor Victoria Rodriguez Ceja is expected to hold interest rates at a record-high for at least the next two meetings before considering neutrality.

Technical Levels: Supports and Resistances

USDMXN currently trading at 17.1846 at the time of writing. Pair opened at 17.121 and is trading with a change of 0.37 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 17.5305, 50 SMA 17.7523, 100 SMA @ 18.117 and 200 SMA @ 18.861.

The previous day high was 17.2555 while the previous day low was 17.1029. The daily 38.2% Fib levels comes at 17.1972, expected to provide resistance. Similarly, the daily 61.8% fib level is at 17.1612, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 17.0642, 17.0073, 16.9116
• Pivot resistance is noted at 17.2167, 17.3124, 17.3693

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