#USDMXN @ 18.3134 trades above 18.3000 as the US Dollar strengthens.

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• USD/MXN trades above 18.3000 as the US Dollar strengthens.

The pair currently trades last at 18.3134.

The previous day high was 18.3469 while the previous day low was 18.0818. The daily 38.2% Fib levels comes at 18.2456, expected to provide support. Similarly, the daily 61.8% fib level is at 18.1831, expected to provide support.

USD/MXN continues its gains for the second consecutive day, trading higher near 18.3000 during the Early European session on Wednesday. The pair strengthens on the back of the upbeat PMI data from the United States, which bolsters the US Dollar (USD).

Mexico released its inflation data on Tuesday, revealing that the Consumer Price Index (CPI) rate for the first half of October continued its decline. The report showed a print of 0.23% against the market consensus of 0.34% and 0.25% previously.

The Bank of Mexico (Banxico) has kept interest rates at 11.25% since March 2023. Despite the sustained rate, market participants are anticipating the possibility of the first rate cut in 2024.

The US Dollar Index (DXY) staged a recovery from monthly lows, finding stability around 106.20, propelled by positive preliminary S&P Global PMI figures released on Tuesday.

However, the decline in US Treasury yields, currently standing at 4.82% for the 10-year yield, could exert downward pressure on the US Dollar (USD).

In October, the US S&P Global Composite PMI demonstrated growth, rising from 50.2 to 51.0. The Services PMI experienced an uptick, reaching 50.9, while the Manufacturing PMI increased to 50.0. Significantly, the manufacturing index has consistently remained above the 50-point threshold for the past six months, indicating a positive trend in that sector.

Investors are anticipated to closely track the US Q3 Gross Domestic Product (GDP) on Thursday, with additional focus on the US Core Personal Consumption Expenditures (PCE) data scheduled for Friday. Additionally, Mexico’s Trade Balance data is set to be released on Friday.

Technical Levels: Supports and Resistances

USDMXN currently trading at 18.2906 at the time of writing. Pair opened at 18.2541 and is trading with a change of 0.2 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 17.9978, 50 SMA 17.4784, 100 SMA @ 17.2606 and 200 SMA @ 17.7448.

The previous day high was 18.3469 while the previous day low was 18.0818. The daily 38.2% Fib levels comes at 18.2456, expected to provide support. Similarly, the daily 61.8% fib level is at 18.1831, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 18.1083, 17.9625, 17.8432
• Pivot resistance is noted at 18.3734, 18.4927, 18.6385

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