USDMXN gives up 0.24% at 19.0833 close to two-month lows after Mexico Retail Sales (year over year) came in at 2.6% topping expectations of 1.9% in August, the monthly reading came in at 0.3% also above expectations of 0.1%. Mexican GDP growth rate is expected to be 0.40% for the Q3.
The Bank of Mexico in its last policy meeting cut interest rates for the second time since 2014 by 25 basis points to 7.75%. I believe that Banxico will continue in that direction with one more rate cut in the upcoming months.
On the technical analysis side, the momentum is bearish for the short term as the pair trades below all major daily moving averages. On the downside, first support for the pair stands at 19.0830 today’s low and then at 19.010 the low from July 29th. In case of a break below that level the way to yearly lows will be open.
On the upside, first resistance stands 19,1383 today’s high then at 19.2607 the 200-day moving average, while more offers will emerge at 19.3808 the 100-day moving average.Download our latest quarterly market outlookfor our longer-term trade ideas.
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