The exchange rate between the US dollar and the Mexican peso, which is currently at 16.8714, has received some temporary support around 16.82 following recent movements in the USD Index.

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• USD/MXN has found a temporary cushion near 16.82 after coping action in the USD Index.

The pair currently trades last at 16.8714.

The previous day high was 16.9626 while the previous day low was 16.8252. The daily 38.2% Fib levels comes at 16.9063, expected to provide resistance. Similarly, the daily 61.8% fib level is at 16.9667, expected to provide resistance.

The USD/MXN has found intermediate supported after correcting to near 16.82 in the early European session. The downside bias in the asset has not faded yet and for a sustained bullish reversal, the pair has to pass through various filters. The major has followed the footprints of the US Dollar Index (DXY), which has also made a recovery attempt around 99.55.

S&P500 futures are showing choppy moves in early London, portraying quiet market sentiment for now. The overall market mood is quite upbeat as investors are hoping for a skip in the rate-hiking regime by the Federal Reserve (Fed) consecutively.

US equities are in the grip of bulls but uncertainty could emerge as firms will start reporting second-quarter results starting with big banks. Earnings and guidance could be subdued due to aggressive policy-tightening by the Fed and tight credit conditions by commercial and regional banks.

The US Dollar Index remained under pressure as inflationary pressures have softened beyond expectations and are sufficient to support expectations of only one more interest rate hike this year. Meanwhile, United States labor market conditions are still tight as weekly initial jobless claims have dropped for the week ending July 07. The US Department of Labor reported that individuals claiming for the first time were 237K vs. expectations of 250K and the former release of 249K.

On the Mexican Peso front, INEGI reported that monthly Industrial Output (May) reported an expansion of 1.0% vs. expectations of a stagnant performance. On an annualized basis, economic data expanded by 3.9% against the consensus of 1.9% and the former release of 0.7%.

Technical Levels: Supports and Resistances

USDMXN currently trading at 16.8568 at the time of writing. Pair opened at 16.8422 and is trading with a change of 0.09 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 17.1012, 50 SMA 17.3945, 100 SMA @ 17.8178 and 200 SMA @ 18.5794.

The previous day high was 16.9626 while the previous day low was 16.8252. The daily 38.2% Fib levels comes at 16.9063, expected to provide resistance. Similarly, the daily 61.8% fib level is at 16.9667, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 16.7855, 16.669, 16.5295
• Pivot resistance is noted at 17.0415, 17.181, 17.2975

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