- Mexico: slowdown in the fourth quarter.
- Important US data on Thursday, next week it will be the Fed’s turn.
- USD/MXN maintains a bearish bias in general, but with current support at 18.75/18.80.
USD/MXN is rising slightly on Thursday after having managed to hold above the 18.75 zone. The pair is trading sideways ahead of important US data releases and with the Federal Reserve meeting on the radar.
Looking at data and the Fed; then to Banxico
The dollar marked lows in months against several currencies hours ago, but then recovered ground. Equity markets are modestly up, as are Treasury yields.
The expectation on Thursday is in the US economic reports, among which the fourth quarter GDP stands out, which is expected to show an expansion at an annualized rate of 2.6%. In addition, the weekly report on jobless claims, new home sales, durable goods orders, foreign trade and the Kansas Fed manufacturing index will be released.
The data will serve to shape expectations for the meeting of the Federal Reserve. The decision will be known next Wednesday and a rise of 25 basis points is expected.
In Mexico, on Wednesday a contraction in the November economic activity index of 0.45% was known, worse than expected; and an increase of 3.3% compared to a year ago, less than the 4.4% of the previous month. TD Securities analysts say this confirms that the economic slowdown began in the fourth quarter and according to them should extend into 2023. “We currently expect growth of 1% for 2023, due to weak manufacturing activity in the US and the delayed effects of Banxico’s monetary policy adjustment conditions”, they stated. On Thursday it was learned that the unemployment rate in Mexico remained at 3.0% in December
The next meeting of the Bank of Mexico It will be on February 9. For now, a new interest rate hike is expected, which might not be the last.
USD/MXN Technical Overview
The dominant trend in USD/MXN remains bearish. At the moment the 18.75/80 zone is being an important support that limits the losses. In case of falling below, the next target level is around 18.67. If the latter were to be drilled, this year’s minimum at 18.56 would be exposed.
If it cannot break 18.75 in the short term, an upward rebound would be expected, which could reach 18.90. Then the next resistance is at the critical zone of 19.00, which also contains the 20-day moving average. A close above would enable the dollar to rise further and go to test last week’s highs at 19.11.
|Today’s last price||18.8357|
|Today Daily Change||0.0512|
|Today Daily Change %||0.27|
|Today daily open||18.7845|
|Previous Daily High||18.8538|
|Previous Daily Low||18.7672|
|Previous Weekly High||19.11|
|Previous Weekly Low||18.5663|
|Previous Monthly High||19.9181|
|Previous Monthly Low||19.1084|
|Daily Fibonacci 38.2%||18.8003|
|Daily Fibonacci 61.8%||18.8207|
|Daily Pivot Point S1||18.7499|
|Daily Pivot Point S2||18.7153|
|Daily Pivot Point S3||18.6634|
|Daily Pivot Point R1||18.8364|
|Daily Pivot Point R2||18.8883|
|Daily Pivot Point R3||18.9229|
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.