The currency pair USDMXN, currently trading at 17.0400, is hovering around 17.00, marking a significant increase from its lowest point of the day at 16.7083. This rise can be attributed to month-end transactions and a combination of US economic data that is neither entirely positive nor negative, ultimately benefiting the US dollar.

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• USD/MXN trades around 17.00, up significantly from a daily low of 16.7083, as month-end flows and mixed US economic data favor the Greenback.

The pair currently trades last at 17.0400.

The previous day high was 16.8036 while the previous day low was 16.7269. The daily 38.2% Fib levels comes at 16.7562, expected to provide support. Similarly, the daily 61.8% fib level is at 16.7743, expected to provide support.

The Mexican Peso (MXN) plunged more than 1.62% against the US Dollar (USD) late in the New York session due to month-end flows favoring the USD, mixed US data, as well as Bank of Mexico (Banxico) news. Therefore, the USD/MXN is trading at 17.0079 after hitting a daily low of 16.7083.

Wall Street trades mixed as investors brace for August’s Nonfarm Payrolls report release. Analysts estimate the US economy added 170K jobs, 17K less than July’s data, while Average Hourly Earnings are foreseen at 4.4% YoY, unchanged. Later in the day, the Institute for Supply Management (ISM) will reveal the Manufacturing PMI, estimated at 47, above July 46.4, with most subcomponents seen increasing except for the employment index.

Aside from this, the US economic agenda on Thursday revealed the Federal Reserve’s preferred gauge for inflation, the Personal Consumption Expenditure (PCE), was 3.3% YoY, as expected, but exceeded June’s 3%. Core PCE, sought by Fed members as its focal point, is stickier than what policymakers were projecting, stands at 4.2% YoY as foreseen but above the previous month’s 4.1%. At the same time, the unemployment claims came below estimates of 235K, at 229K, contrary to earlier data revealed during the week, that underscored the labor market was losing traction.

That said, the USD/MXN edged higher, not only on US data. Banxico reported that it’s winding down its hedge program settled in Mexican Pesos.

The exotic pair rallied sharply and touched a daily high of 17.1114 before reversing its course below the 17.0000 mark. However, traders are eyeing a daily close above 17.0000, with USD/MXN buyers setting their sights on the 100-day Moving Average (DMA) at 17.3072.

In the meantime, the US Dollar Index, which measures the buck’s value against a basket of six currencies, rises by 0.41%, at 103.606. US Treasury bond yields and worldwide remain depressed as traders prepare for Friday’s Nonfarm Payrolls report.

Aside from this, Banxico’s Governor Victoria Rodriguez Ceja took off from the table rate cuts, as she added, “The outlook ahead continues to be complex and uncertain. It’s important to remember that disinflation periods are not linear.” Should be said, Banxico raised growth estimates for Mexico’s economy in 2023 to 3%, above the previous estimate of 2.3%.

On the central bank front, Atlanta’s Fed President Raphael Bostic said the policy was appropriately restrictive to bring inflation towards the US central bank’s 2% target over a “reasonable” period.

After the USD/MXN breached the 50 and 20-DMAs, the pair must clear resistance levels if buyers want to regain control. A daily close above 17.0000 could spur a rally toward the August 17 high of 17.2073. A breach of the latter would expose the May 17 daily low, at 17.4038, seen as a crucial level for traders. Once cleared, the USD/MXN would achieve successive series of higher highs and lows, opening the door to test the 200-(DMA) at 18.0671.

Technical Levels: Supports and Resistances

USDMXN currently trading at 16.9959 at the time of writing. Pair opened at 16.7419 and is trading with a change of 1.52 % .

The pair is trading below its 20 Daily moving average @ 16.9965, above its 50 Daily moving average @ 16.9766 , below its 100 Daily moving average @ 17.3237 and below its 200 Daily moving average @ 18.0877

The previous day high was 16.8036 while the previous day low was 16.7269. The daily 38.2% Fib levels comes at 16.7562, expected to provide support. Similarly, the daily 61.8% fib level is at 16.7743, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 16.7114, 16.6808, 16.6347
• Pivot resistance is noted at 16.788, 16.8341, 16.8646

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