USDMXN Turns Higher – U.S. Initial Jobless Claims Disappoint

USDMXN trades sharply higher today amid risk-off sentiment which sends investors back to the USD safe-haven hub. Fed yesterday triggered a reversal in the USD sell-off, warning on the vulnerabilities of the recent economic rebound. 

FOMC said that the coronavirus crisis weighing on U.S. economy and threatens the medium-term outlook. The rebound in employment the previous months had slowed down in the last month after the rising number of new COVID-19 infections in many States. Several FOMC members support further accommodation policy while the interest rates would stay at current levels until the end of the year. 

The monetary committee also raised concerns over the potential benefits of the yield curve control. FOMC added that the path of the economic recovery would depend on the containment of the coronavirus.

Initial Jobless Claims Below Expectations

The U.S. Initial Jobless Claims registered in at 1,106,000 disappointing analysts who expected around 925,000 in the week of August 14. The previous week figure was at 971,000. Initial Jobless Claims 4-week average dropped to 1,175,750 from 1,252,750 the previous week. 

Philadelphia Fed Manufacturing Business Outlook

Philadelphia Fed Manufacturing Business Outlook Survey dropped to 17.2 in July from 24.1 in June. Analysts expectation was for 21. The new orders index dropped to 19 from 23 while the current shipments index fell to 9.4 in August. The current employment index fell to 9.0 in August.  

USDMXN Daily Analysis 

USDMXN is 0.48% higher at 22.2464 trying to break above the recent consolidation area. The outlook is neutral for the pair as it is trapped below the 50-day moving average. 

Bulls need to break above the daily high first at 22.3315, and then above the 50-day moving average at 22.4343 to regain control of the pair. Above 22.4343 the next hurdle is at 22.6060 the top from August 7.

On the flip side, initial support for USDMXN stands at 22.1021. A break below might challenge the next support at 21.9836 the low from yesterday. Moe bids might emerge at 21.9020 the low from August 17. 

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USDMXN Daily Chart

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