The US dollar to Mexican peso exchange rate, currently at 17.0013, is stabilizing at around 17.00 in anticipation of the release of US Purchasing Managers’ Index (PMI) data and Mexico’s inflation data by the Federal Reserve.

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• USD/MXN consolidates around 17.00 ahead of Fed US PMI and Mexico’s inflation data.

The pair currently trades last at 17.0013.

The previous day high was 17.0512 while the previous day low was 16.8611. The daily 38.2% Fib levels comes at 16.9786, expected to provide support. Similarly, the daily 61.8% fib level is at 16.9337, expected to provide support.

The USD/MXN pair demonstrates topsy-turvy moves near the crucial resistance of 17.00 in the Tokyo session. The asset struggles to gauge a clear direction as investors shift their focus toward the interest rate decision by the Federal Reserve (Fed), which will be announced on Wednesday.

S&P500 futures remains muted, continuing their lackluster performance displayed on Friday. A stock-specific action is witnessed in the US equities as firms have started reporting earnings for the second quarter. The US Dollar Index (DXY) remains choppy in Asia as investors prefer to remain light ahead of Fed’s monetary policy.

It is widely expected that the Fed won’t skip hiking interest rates consecutively and will raise rates by 25 basis points (bps) to 5.25-5.50%. This could be the last nail in the coffin and the Fed will keep elevated interest rates stable this year. According to Goldman Sachs, the Federal Reserve’s widely-expected interest rate hike at its upcoming policy meeting next week will be “the last” of the US central bank’s long-running tightening cycle.

Before Fed’s policy, investors’ focus will be on preliminary S&P PMI data for July, which will be published today at 13:45 GMT. As per the estimates, Manufacturing PMI is seen improving nominally to 46.4 vs. the former release of 46.3. This could be a consecutive contraction in factory activities as the figure would be below 50.0.

Meanwhile, the Mexican Peso would hog the limelight ahead of semi-annual inflation data, which will release at 12:00 GMT. Earlier, headline inflation delivered a pace of 0.02% while the core Consumer Price Index (CPI) excludes volatile oil and food prices remained at 0.11%.

Later this week, Mexico’s Unemployment data for June will be in focus. The jobless rate is expected to drop to 2.8% against the former release of 2.9%.

Technical Levels: Supports and Resistances

USDMXN currently trading at 16.9978 at the time of writing. Pair opened at 16.9854 and is trading with a change of 0.07 % .

The pair is trading above its 20 Daily moving average @ 16.9862, below its 50 Daily moving average @ 17.2687 , below its 100 Daily moving average @ 17.7181 and below its 200 Daily moving average @ 18.4664

The previous day high was 17.0512 while the previous day low was 16.8611. The daily 38.2% Fib levels comes at 16.9786, expected to provide support. Similarly, the daily 61.8% fib level is at 16.9337, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 16.8806, 16.7758, 16.6905
• Pivot resistance is noted at 17.0707, 17.156, 17.2608

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