USDMXN slides today as the risk-on sentiment continues to push higher the risky assets as investors dumb the safe-haven assets and the USD. Weak economic data from the USA doesn’t help the greenback.
Philadelphia Fed Non-manufacturing index Disappoints
The Philadelphia Fed Non-manufacturing index dropped to 17.9 in August from 23.7. The S&P/Case Shiller home price index came in at 3.5% in June below the forecasts of 3.8. The U.S. Housing Price index registered in at 0.9% in June above the expectations of 0.1%.
In Mexico, the yearly inflation rose to 3.9% above the expectations and now has reached the upper limit set by the Bank of Mexico. The rise in inflation might halt the easing cycle by Banxico at least for now, as economists predict that inflation will drop in the upcoming quarter.
The mini-rally today in crude oil prices support the Mexican peso. Brent crude oil is 2.18% higher at 45.97, while the WTI futures are 1.83% higher at 43.40.
USDMXN is 0.43% lower at 21.9015 as the pair resumes the downward trend. The attempt by the greenback in early August to return above the 50-day moving average failed, and bears pushed the pair lower.
Looking at lower levels, first support for USDMXN is at 21.8765. A move below might challenge 21.6310 the low from June 10. The 200-day moving average at 21.4288 would provide the next support for the pair.
On the flip side, initial resistance would be met at 22.0158 today’s top. More sellers would emerge at 22.1547 the high from August 21. Only if USDMXN break above the 50-day moving average at 22.4119 would cancel the bearish trend.
USDMXN Daily Chart