Selling pressures resumed today in USDMXN after a short break last Friday. The pair rebounded on Friday after the news of the killing of the Iranian General Soleimani. Now investors await the retaliation from Baghdad.
On the data front, Mexican Trade Balance last week, registered in at $0.79B, topping estimates of $-0.245B, while the Trade Balance came in at $0.545B, below expectations of $0.824B in November.
The Central Bank of Mexico cut its interest rates for the fourth time in a row by 25 basis points to 7.25% on December 19th. Emerging currencies and the Mexican peso appreciated during December amid the signing of the Phase One trade deal between USA and China.
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USDMXN Price Analysis
US Dollar is mostly lower today amid the geopolitical tensions between Iran and the USA in the Middle East. On the technical analysis side, the USDMXN outlook is negative as USDMXN pair trades below all significant daily moving averages.
Traders attention is to lower levels, as Friday’s rebound cancelled by massive offers around 18.90. On the downside, initial support for the pair stands at 18.8464 today’s low. A credible break below would open the way for a move down to the next support level at 18.7950 the low from December 30th. If bears breach that level then we have to go back to April 15th at 18.7569 to find the next support level.
On the upside, immediate resistance for USDMXN will be met at 18,9503 today’s high. The next level to watch on the upside stands at 19.024 the high from Friday’s trading session. Bulls need to surpass above the 50-day moving average at 19.1781 in order to attract more bids. A settlement above the 50-day moving average might change the recent negative wave that started in early December. The next resistance will be met at the 100-day moving average at 19.3797.
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