The Dollar returns to the 17.00 zone against the Mexican Peso after falling to 17-day lows with the NFP

• USD/MXN has bounced higher after falling to 17-day lows of 16.82 after the NFP.
• The dollar recovers ground when it is known that the services sector contracted in April but the prices paid rose to their highest levels since January.
• The United States generated 175,000 Non-Farm Payrolls (NFP) in April compared to the previous 315,000 and the 243,000 expected.

USD/MXN reacted to the weak US employment data for April with a sharp drop to 16.82, a new 17-day low. Subsequently, the Dollar regained ground towards the 17.00 area, driven by the ISM of the United States services sector. At this moment, the pair is trading above 16.97, losing a slight 0.06% daily.

Dollar swings on US NFP and ISM services data

The United States Department of Labor announced today that it generated 175,000 Non-Farm Payrolls in April, well below the 243,000 expected. The unemployment rate increased one tenth to 3.9% compared to 3.8% the previous month.

The ISM non-manufacturing PMI data showed that the services sector contracted in the United States during the month of April. The indicator fell to 49.4 points from 51.4 in March, worsening the prospects for a rise to 52. This is the weakest figure recorded in 16 months. The prices paid component, however, shot up to 59.2 from 53.4, reaching its highest level since January.

The Dollar Index (DXY) fell to 23-day lows at 104.52 with the NFP release but has risen to 105.16 with the ISM Services PMI data. At the time of writing, the index is trading above 105.05 points, still losing 0.31% on the day.

USD/MXN traders will wait to digest the data before focusing on next week. In the next few days there are no important publications in the United States, but there are in Mexico. On Tuesday the consumer confidence data for April will be known and on Thursday the inflation for the same month. Furthermore, at 19:00 GMT on Thursday, Banxico will announce its decision on interest rateswhich can cause important movements in the pair.

USD/MXN Price Levels

On short-term charts, USD/MXN is starting to trend lower. A break of today's low at 16.82 can take the pair to the intermediate support zone at 16.50/16.55 (psychological zone and April 15 lows, respectively). Further down, the floor is at 16.26, the minimum of 2024 and of the last almost nine years tested on April 9.

On the upside, the Dollar would have to overcome the 17.39 zone, where the maximum of the previous week is (April 25), to be able to advance towards the psychological zone of 18.00.