The price of the Dollar finds support against the Mexican Peso near 17.40 at the end of the week

• The USD/MXN price has found support around the 17.40/45 zone.
• The Dollar maintains its strength around 105.00.
• The focus shifts to US inflation data to be published next Wednesday.

He USD/MXN It reached three-month highs yesterday at 17.70. As the bullish movement petered out, the pair retreated to 17.42, a two-day low. Today, Friday, the pair opened the day around 17.60 and then returned to the vicinity of 17.40/45, where it remains for the end of the week.

The Dollar ends the week reigning on the forex board

Risk aversion during the week and confidence that the Fed will keep interest rates high have given a strong boost to the Dollar in the first full week of September. He Dollar Index (DXY) yesterday reached its highest level in six monthssince March, at 105.15, and today it remains around 105.00 although at the European opening it has briefly fallen to a two-day low at 104.75.

CME Group’s FedWatch tool shows that markets are pricing in a 94% chance this Friday that the Federal Reserve will keep rates unchanged at its September meeting. By November that percentage falls to 56.7%, with 41.3% hoping for a new increase, the last one before the end of the year. For December, that possibility of increase decreases to 39.8%.

For its part, Mexico published its inflation data yesterday, showing a slowdown in prices for the seventh consecutive month. The CPI stood at 4.64% in August, above the 4.61% expected by the market.

Without relevant data for the remainder of Friday, investors’ focus will be on next week. Mexico will release its July industrial production figures on Monday, while the US will release its August inflation data on Wednesday, potentially generating strong movements in the USD/MXN.

USD/MXN Price Levels

With USD/MXN trading at the time of writing above 17.48, losing 0.65% on the day, the first relevant support is located at the old resistance 17.40. Below there is an intermediate containment level around 17.20. If it breaks, the target is at the psychological level of 17.00.

If the bullish trend that has dominated the week resumes, the pair will have to overcome 17.70 to face the zone of 17.99/18.00, where is the maximum of last May 23 and a round level, respectively. A clear jump above this region will point towards 18.20 April 27 ceiling.