USDMXN continues lower for the third consecutive session as USD weakness continues across the board. USD failed to break above the 50-day moving average, and another leg lower started that drove the price today to two-week lows.
On the economic data front, the Mexico Retail Sales came in at 0.8%, beating the expectations of -20.4% in May. The yearly reading for the Retail Sales came in at -23.7% well below the expectations of -18.5%.
From the U.S. the Existing Home Sales came in at 4.72 million below the expectations of 4.78 million in June. The Existing Home Sales Change came in at 20.7%, below the consensus of 24.5%. The Housing Price Index dropped to -0.3% in May below the forecasts of +0.3%. The U.S. MBA Mortgage Applications came in at 4.1% on the week July 17; the previous reading was at 5.1%.
Mexican peso managed to recover some of the coronavirus sell-off in March and gains momentum as the economies return gradually to pre-coronavirus levels. As the economies reopen, investors shift their attention to risky assets and dump the USD.
Crude oil rebound also supported Mexican peso as the WTI futures contract and Brent crude oil prices reached four-month highs.
USDMXN Price Technical Analysis
USDMXN is 0.16% lower at 22.2979 facing the resistance at the 50-day moving average, which has capped the pair for the last month. Short term momentum remains bearish below the 50-day moving average while the longer-term outlook momentum continues bullish above the 200-day moving average.
Looking south, the initial support for the USDMXN stands at 22,2497 the daily low. The next support would be met at 22.1626 the low from July 6 trading session. Next support zone for the pair is at 21.9101 the low from June 16.
On the flip side, the first obstacle for the USDMXN pair stands at 22.4247 the daily high. A move above would target 22.5341 the 50-day moving average. In case the pair breaks above 22.5341, then the next hurdle will be met at 23.0554 the 100-day moving average.