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USDMXN Rebounds From Three-Month Lows On Risk-Off Sentiment

USDMXN rebounds today after the sharp sell-off that started one month ago after the improvement in investors sentiment as the markets began to discount the reopening of the economies around the globe. 

Investors shift their attention to more risky assets such as stocks and emerging markets currencies. On the data front, the Mexico Headline Inflation came in at 0.38% below the expectations of 0.5% in May. The 12-Month Inflation registered in at 2.84% below the forecasts of 2.97% in May. The Core Inflation came in at 0.3% below the expectations of 0.4%. 

From the United States, the JOLTS Job Openings came in at 5.046M topping the expectations of 5M in April. The Wholesale Inventories registered in at 0.3%, below the forecasts of 0.4%. The United States IBD/TIPP Economic Optimism month over fell to 47 in June from previous 49.7. 

Risk-off sentiment as the stocks have reached three-month highs might trigger some buying interest for USD, and I would not be surprised if the pair break above the 22.00 mark. 

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USDMXN Price Technical Analysis

USDMXN is 1.02% higher at 21.7112 halting a negative momentum that started in early April after the pair hit record highs. The pair tested in early European session the 100-day moving average but rejected, as the bears are still in control below that resistance line. The technical picture is neutral now. Long positions might be initiated above the 100-day moving average. Failure to break above the 100-day SMA might accelerate the selling pressures. 

 On the upside, the first resistance for the pair stands at 21.9154 the daily top. A break above might push the price to 22.1120 the high from June 2 trading session. In case the USDMXN pair breaks above 22.1120, then the next resistance will be met at 22.4983 the high from May 27.  

On the flip side, the initial support for the USDMXN pair will be met at 21,4632 today’s low. The next support area for the pair stands at 20.7597 the low from March 11. The next target on the downside for the shorts is at 20.6018 the 200-day moving average.