USD/MXN falls back to 17.89 awaiting biweekly inflation in Mexico and the FOMC Minutes

• USD/MXN falls to daily lows at 17.89.
• The dollar rises to a nine-week high at 103.77.
• Focus on Mexican inflation for the first half of May and the FOMC Minutes.

The USD/MXN reached the 17.99 level, the highest in three weeks, at the American opening on Tuesday, staying at the gates of the psychological zone of $18.00. During this Wednesday, the pair has lost traction, falling at European noon to 17.89, a new daily minimum.

The retracement of the pair is momentarily ignoring the renewed strength of the Dollar, whose DXY Index just climbed to 103.77, the highest level seen since last March 20. The caution of the markets before the FOMC minuteswhich could give clues as to whether there is a further rate hike or a pause in the June Fed meeting, are boosting the dollar, which is still benefiting from uncertainty surrounding debt ceiling negotiations.

On the Mexican side, the focus is on the inflation data for the first half of May, which is expected to fall from -0.16% to -0.19%. Core inflation is expected to rise from 0.18% to 0.21%. The country is also pending in these hours of the Popocatepetl volcano, which paralyzed several of the main Mexican airports after erupting last weekend. Puebla, one of the most affected, is returning to a certain normality in the last hours. On an economic level, the Secretary of the Treasury of Mexico, Rogelio Ramírez, stated yesterday that the economic policy applied by the current government gives the country a solid fiscal position to face external shocks.

USD/MXN Levels

With the USD/MXN trading at the time of writing above 17.9069, losing 0.38% daily, the first support level appears at 17.86soil of May 23, prior to the zone 17.60/61, old resistance and low of May 19 respectively. further down wait 17.42seven-year bottom reached on May 15 of this year.

In case of taking new momentum, the initial resistance appears at the psychological level of 18.00. A clear break above this level will point to 18.20ceiling of April 27 and of the last seven weeks.