USDMXN trades higher for the fifth consecutive trading session making fresh two week highs after better than expected economic data from the USA. The United States ISM Manufacturing PMI came at 54.2 beating the forecasts of 53.6 in July. New Orders Index came in at 61.5, above expectations (46.8) in July Manufacturing Employment Index below expectations (48.3) in July: Actual (44.3).
United States Construction Spending (MoM) below forecasts (-0.5%) in June: Actual (-0.7%) United States Markit Manufacturing PMI below expectations (52) in July: Actual (50.9).
Traders now await the Central Bank of Mexico interest rates decision on August 13, and analysts expect a cut of 50 to 75 basis points. The interest rates in Mexico stand now at 5% while the inflation rose to 3.3% in the previous month. Mexico economy contracted by 17.30% in the second quarter amid the coronavirus lockdown.
US dollar was under selling pressure in the last two months as the numbers of new coronavirus cases continue to rise. Investors fear that a second wave of the virus might halt the recent economic rebound.
USDMXN Price Technical Analysis
USDMXN is 1.33% higher at 22.5736 breaking above the 50-day moving average, which cancelled the bearish momentum that formed the previous week. Bulls need a clear close today above 22.3540 that would attract more bulls in the action.
The short term picture has improved, and an attempt to higher is possible. The critical resistance stands at 23.1647 the 100-day moving average.
On the other side, support for the pair stands at 22.2525 today’s low. A break below might challenge 21.8549 the July lows. Further support would be met at 21.0792 the 100-day moving average.
USDMXN Daily Chart