The USDMXN pair soared from a test of support last week and could be set for further gains on the week. Data out showed that the Mexican unemployment rate is still stuck at six-year highs, despite a dip from 5.4% in July to 5.2% in August. The figures were balanced out by a rise in the country’s trade surplus to $6 billion. The greenback was 0.30% on the news but there are some heavy events ahead for the U.S. dollar this week.
Tuesday sees the first Presidential debate between Donald Trump and Joe Biden. The pair are likely to clash on most issues and the market will be looking to see who gains ground in the polls as an indicator of the economic path for the U.S. Joe Biden has promised to raise taxes and commit large sums to the green new deal project and this could hit the dollar.
The economic calendar is also busy for the dollar with finalized GDP for the U.S. on Wednesday, which will be closely followed by PCE inflation figures and manufacturing PMIs on Thursday. If the economy sees strong inflation and manufacturing figures then this could power the greenback higher.
Friday will culminate with Non Farm Payroll numbers for the U.S. with analysts looking for 875k jobs added and a further dip in the unemployment rate. The market was surprised by the recent drop below 10% unemployment and President Trump will be hoping for a big number with this being the last payrolls release before the election run-in really heats up.
USDMXN Technical Outlook
The USDMXN pair was higher after a strong bounce from the 50-day moving average, which also coincided with strong horizontal support at 21.50. The first target for the dollar is 23.25 and a close above there in the weeks ahead would have the potential to test the highs at 25.00. The Investing Cube team is currently available to assist all levels of traders with a Forex Trading Course or one-to-one coaching.
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USDMXN Weekly Chart
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