USDMXN correction continues the correction started in December cancelling the rally that began since November and erased almost all the gains. In the United States, Producer Price Index (month over month) came in at 0% below the expectations of 0.2% in November. The PPI yearly reading came in at 1.1% below consensus (1.2%) in November. Initial Jobless Claims came in at 252K beating expectations of 213K on December 6. The Continuing Jobless Claims came in at 1.667M below expectations of 1.678M on November 29.
From Mexico the Industrial Output (month over month) came in at -1.1% on October, the previous reading was 0%, the yearly reading came in at -3% below the forecasts of -2.1%.
Yesterday the FOMC voted unanimously to keep rates unchanged, as was expected by markets after three consecutive 25bp cuts. The dot plot outlook for 2020 suggests that the monetary policy will remain unchanged.
Banxico in its latest policy meeting cut interest rates by 25 bps to 7.5% also for the third consecutive meeting. Banxico noted that in the presence and possible persistence of factors that involve risks to inflation and its expectations, the interest rate policy will be adjusted to achieve the convergence of inflation to its target.
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USDMXN Support and Resistance Levels
On the technical side, the outlook for the pair is bearish as the pair trades below the major moving averages. Traders attention is on the downside, where the first support for the pair stands at 19.08116 today’s low, while a credible break below might open the way for a move down to 19.049 the low from November 4th.
On the upside, USDMXN immediate resistance stands at 19,1366 today’s top; while the next resistance level will be met at the 50-day moving average around 19.2936. More offers will emerge at 19.2796 the 100-day moving average.
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