USD / MXN corrects to 20.05, remains bullish in the short term

• The dollar remains strong against emerging markets in a context of caution.
• The market attentive to the decisions of the Federal Reserve.
• The Mexican peso stable on Wednesday, before the Fed.

The USD / MXN is trading with a slight decline on Wednesday, before the decisions of the Federal Reserve, continuing with the downward correction, after having jumped to 20.20 at the start of the week. The cross operates in the 20.10 zone, with a bearish daily bias, but with the daytime chart still showing a strong dollar.

The greenback had been rising against the Mexican peso and rose even higher on Monday in a climate of risk aversion across global financial markets, which put downward pressure on emerging market assets. The fears have eased on Wednesday. The focus of attention now turns to the Federal Reserve.

The Wednesday will conclude the two-day FOMC meeting and monetary policy decisions will be announced. No changes are expected when it comes to interest rates. The focus will be on what you can say about the shopping program. These indications are expected to have a broad impact on the market and to cut through the lateral movements that are being seen in the main crosses of the currency market.

On Mexico the key figure for the week will be released on Thursday: inflation for mid-September. July retail sales figures will be released on Friday.

Resistance at 20.20

The USD / MXN has initial support around 20.05 (the low of the last two days) and below in the 20.00 area, which in addition to being a round number, near there are passing relevant short-term moving averages. A drop below would take out the current strength of the dollar.

Get up, if USD / MXN surpasses and affirms above 20.20, the price will be ready for a bullish extension with target at 20.30; next resistance appears at 20.45.

Technical levels