The US dollar to Mexican peso exchange rate, currently at 17.5886, has surpassed an important level of resistance at 17.4038. The rate is now at 17.5481, as the US ISM Non-Manufacturing PMI data exceeds predictions, potentially increasing the likelihood of a rise in interest rates.

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for FREE REGISTER to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level1)]

• USD/MXN pair breaks crucial resistance at 17.4038, trading at 17.5481, as US ISM Non-Manufacturing PMI beats expectations, renewing rate hike possibilities.

The pair currently trades last at 17.5886.

The previous day high was 17.4582 while the previous day low was 17.1704. The daily 38.2% Fib levels comes at 17.3483, expected to provide support. Similarly, the daily 61.8% fib level is at 17.2803, expected to provide support.

The Mexican Peso (MXN) extended its losses versus the US Dollar (USD) on Wednesday, climbing above a crucial resistance level seen at 17.4038, which, if it holds, could pave the way for further upside. Data from the United States (US) put rate hike expectations back on the table, boosting the Greenback. The USD/MXN is trading at 17.5481 after hitting a daily low of 17.3912, gains 0.78%.

Earlier in the North American session, the Institute for Supply Management (ISM) announced that business activity in the services segment, the Non-Manufacturing PMI for August, was better than expected, with the reading coming at 54.5 from the 52.5 expected and above July’s 52.7. The same report showed that the price index subcomponent climbed by 58.9 in August from 56.8 in July.

Following the data, expectations for further tightening by the Fed grew. The CME FedWatch Tool shows odds for a 25 bps increase in November hit 47.2%, above yesterday’s 42% chance. Furthermore, rates are also expected to stay at the 5.50%-5.75% range for December before the US central bank cut rates early in 2024.

Consequently, US Treasury bond yields soared, with the 10-year benchmark note rate at 4.296%, gains 10 basis points, while the US Dollar Index reached a seven-month high of 105.024, up 0.21%.

In the meantime, Boston Fed’s President Susan Collins said the US central bank needs to be patient when deciding the path of monetary policy while stressing the central bank’s commitment to tame inflation to its 2% target. She added Fed officials are discussing if the current level of rates is restrictive enough or more is needed.

Across the border, Mexico’s inflation expected on Thursday would likely shrink for the seventh straight month, according to a Reuters poll. Analysts expect headline inflation at 4.61% while estimating that core would slow to 6.12%, the lowest reading since December 2021. In the meantime, the Bank of Mexico (Banxico) is not expected to cut rates, as said by its Governor Victoria Rodriguez Ceja.

Upcoming events in the week would feature the Mexican Consumer Price Index (CPI), estimated to slow down. On the US front, Initial Jobless Claims, alongside the Fed officials parade ahead of their blackout period for the upcoming September meeting, would shed some clues regarding monetary policy stances.

From a technical standpoint, the pair is getting upward traction, set to test the May 23 swing high of 17.9976, some pips shy of the 200-day Moving Average (DMA) at 18.0879. A decisive break of that area could expose the April 5 daily high at 18.4010, followed by the 18.5000 psychological level. Conversely. If the USD/MXN drops below the May 17 daily low of 17.4038, that would pave the way for further losses. Next, support would emerge at the 100-DMA at 17.2788, followed by the 20-DMA at 17.0221.

Technical Levels: Supports and Resistances

USDMXN currently trading at 17.5817 at the time of writing. Pair opened at 17.4171 and is trading with a change of 0.95 % .

The pair is trading above its 20 Daily moving average @ 17.0031, above its 50 Daily moving average @ 16.9795 , above its 100 Daily moving average @ 17.29 and below its 200 Daily moving average @ 18.045

The previous day high was 17.4582 while the previous day low was 17.1704. The daily 38.2% Fib levels comes at 17.3483, expected to provide support. Similarly, the daily 61.8% fib level is at 17.2803, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 17.2389, 17.0607, 16.9511
• Pivot resistance is noted at 17.5268, 17.6364, 17.8146

[/s2If]
Download Nehcap EAWe have two EAs that are operational on our LIVE accounts.

1. EA-FIX: Check out the details here. Download EA-FIX . EA-FIX is a non-grid HFT scalper.
2. EA-GROWTH: High quality low dd EA using trend grids. Download EA_GROWTHJoin Our Telegram Group

Share this:

• Facebook
• X

Like this:

Like Loading...