USDMXN consolidates for the second consecutive session around 24.00 as the correction from all-time highs stalled at 23.2020. Fitch rating agency cut Mexico’s sovereign rating to BBB-, the lowest of investment grades. The outlook remains stable. S&P had also cut to BBB with negative outlook the previous month.
Mexico economy has been severely battered amid the coronavirus crisis as it depends on oil, tourism. Mexican economy lost 347k jobs on April 6 more than the economy created in full 2019. Consumer confidence in Mexico declined to its lowest point since November 2018 in March, coming in at 42.6, below February’s revised 43.8 reading. IMF forecasts that the Mexican economy will contract by 6.6% in 2020.
Mexico’s President Manuel López Obrador last week announced a relief package to offset the coronavirus outbreak impact but fell short of expectations. The package included about USD 14 billion public-private investment plan for the energy sector; provision of around USD 9 billion in personal and housing loans. Also the continued construction of the government’s projects such as the Santa Lucia airport and Dos Bocas refinery; and about USD 3 billion tax cut to Pemex.
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USDMXN Price Analysis
USDMXN is 0.54% lower at 23.8985 as traders are indecisive about the next move of the pair. The correction from all-time highs stalled earlier this week as the coronavirus fears remerged, and investors shift their attention to safe-haven US Dollar. The technical picture for USDMXN is bullish, and the pullbacks should be considered a buying opportunity.
On the upside, the first hurdle is seen at 24.1406 the daily top. A break above might drive the pair to 24.7800 the high from April 8. In case bids persist then the next resistance stands at 25.0495 the high from April 3.
On the flip side, the first support for USDMXN pair will be met at 23,6976 today’s low. The next critical support for the pair stands at 23.3867 the low from April 15. More bids might emerge at 23.2182 the low from April 13.
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