- The USD / MXN retreats after hitting the highest level since June at 20.64 on Wednesday.
- A correction in the US dollar favored a consolidation around 20.50.
- Banxico is expected to increase the key interest rate by 25 basis points.
The USD/MXN it remains lateralized on Thursday, hovering around 20.50. It is consolidating after rising to 20.64 on Wednesday, the highest level in three months. The key factor in the crossover is still the US dollar.
In a few hours, the Bank of Mexico will announce its monetary policy decision. An interest rate hike of 25 basis points is expected. A larger rise should be positive for the Mexican peso. The coin has been among the worst performers for the week.
From a technical perspective, the indicators are starting to turn south, like the RSI, a sign that the USD / MXN needs to consolidate or correct in the near term before resuming the upside. Strong support is seen at 20.40 and then 20.20. The new range could be between 20.40 and 20.60. A dip below 20.00 should negate the bullish bias and point to a stronger MXN in the future.
On the upside, a close above 20.55 would point to further gains and a possible test of the June high at 20.75, which protects the next resistance around the 21.00 zone.
Daily USD / MXN chart