Despite Banxico’s decision to maintain interest rates, the Mexican Peso remains sturdy with an exchange rate of 17.1044 against the US Dollar.

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• Mexican Peso is resilient despite Banxico keeping rates unchanged.

The pair currently trades last at 17.1044.

The previous day high was 17.1791 while the previous day low was 17.1114. The daily 38.2% Fib levels comes at 17.1373, expected to provide resistance. Similarly, the daily 61.8% fib level is at 17.1532, expected to provide resistance.

The Mexican Peso (MXN) shrugs off the second interest rate pause by the Bank of Mexico (Banxico), advancing against the US Dollar (USD) as the USD/MXN trades with a negative tone, down 0.15%. The USD/MXN trades with losses after hitting a daily high of 17.1400, exchanging hands at 17.070.

Market sentiment is upbeat, as portrayed by Wall Street climbing after posting back-to-back days with losses. Positive data from the United States (US) could not derail the USD/MXN downtrend, as the emerging market currency remains one of the strongest peers trading against the US Dollar, with the USD/MXN posting losses of -12.18%.

Data from the US Department of Commerce showed that Durable Good Orders edged above estimates and crushed April’s data, which was revised, with figures coming at 1.7% MoM, above forecasts of a -1% plunge and April’s 1.2% expansion. Meanwhile, US New Home Sales surprisingly climbed at the fastest pace over one year, up at 12.2% MoM in Ma, compared to April’s 3.5% expansion. New home Sales hit the 763K threshold, above April’s 680K.

The Conference Board (CB) revealed that Consumer Confidence in June improved to 109.7, crushing estimates of 104 and above May’s 10.5 figures. The survey showed an improvement in the labor market, with inflation slowing and income expectations downtick.

In the meantime, the lack of economic data from Mexico keeps investors weighing the latest monetary decision of Banxico, with the central bank keeping rates at 11.25%, unchanged for back-to-back monetary policy meetings. Banxico’s Deputy Governor Jonathan Heath said the bank would do all necessary to bring inflation to its 3% +/- target while emphasizing the need to keep rates high for a prolonged period.

Given the fundamental backdrop, USD/MXN traders will look for Federal Reserve (Fed) Chair Jerome Powell’s speech at a European Central Bank (ECB) event on Wednesday and Thursday. Market participants estimate Powell to keep the FOMC-s press conference tone, leaning towards a neutral stance.

From a technical perspective, the USD/MXN remains downward biased, but sellers are losing steam and unable to break the 17.00 figure. If USD/MXN breaks below the latter, the following support to emerge would be the October 2015 daily low of 16.3267 before the 16.00 psychological level emerges. On the flip side, the USD/MXN buyers must reclaim the 20-day Exponential Moving Average (EMA) at 17.2731 before challenging the May 16 swing low of 17.4039 to have a chance to shift the pair bias.

Technical Levels: Supports and Resistances

USDMXN currently trading at 17.1081 at the time of writing. Pair opened at 17.137 and is trading with a change of -0.17 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 17.3028, 50 SMA 17.6198, 100 SMA @ 17.9993 and 200 SMA @ 18.7621.

The previous day high was 17.1791 while the previous day low was 17.1114. The daily 38.2% Fib levels comes at 17.1373, expected to provide resistance. Similarly, the daily 61.8% fib level is at 17.1532, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 17.1059, 17.0748, 17.0382
• Pivot resistance is noted at 17.1736, 17.2102, 17.2413

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