- The dollar strengthens at the start of the Fed week.
- Banxico would follow the steps next week.
- USD/MXN bullish in the very short term, but stopped by 20.15/20.
The Mexican peso begins the week falling against the dollar in a context of falling markets. The climate of caution continues to prevail at the beginning of a week that will have the meeting of the Federal Reserve.
The USD/MXN started on Monday near 20.00 and since then it has been moving with an upward bias. It recently hit a high for the day at 20.15, matching last week’s peak. After this, it pulled back modestly and is trading around 20.10.
The main factor for these hours of support for the USD/MXN is the strength of the dollar throughout the market. This occurs in advance of the meeting of the Federal Reserve that is expected on Wednesday to announce a rise of 75 basis points.
What the Fed decides and what it says will be key for the financial markets and also the emerging currencies. the turn of Banxico It will be the next week.
USD/MXN rallies remain capped by a major resistance band that starts at 20.15 and may extend to 20.20. A break would leave the dollar ready for more gains, although a clearer signal will be a daily close above 20.25, which would pave the way for 20.45.
If you continue without power with the aforementioned resistance, the first support is at 20.00. Underneath will follow 19.91 and then the more important level of 19.80. A daily close below will put the Mexican peso on track for more gains.
Technical levels
Source: Fx Street
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