USD/MXN falls on risk momentum and dollar weakness ahead of next week’s FOMC

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  • The USD/MXN pair fell back from daily highs above $19.00 on improving market sentiment.
  • US data shows the economy’s resilience despite continued aggression from the Fed.
  • Investors are watching US Industrial Production, Consumer Sentiment, and next week’s FOMC meeting.

He USD/MXN It is around $19.00 on Thursday, with risk aversion taking center stage, in the midst of a turbulent week, in the global banking system. Investors’ flight to safety weighed on the Mexican peso (MXN), which will end the week down 0.15% after hitting a multi-year low of 17.8967. However, the MXN maintains its gains. At the time of writing, the USD/MXN is trading around 18.95, losing 0.23% on the day.

Improving sentiment against the USD/MXN

Traders’ sentiments improved after learning that major United States (US) banks had stepped in to help First Republic Bank. The European Central Bank (ECB) raised rates by 50 basis points, saying inflation remained high and offering no hint on future monetary policy meetings.

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Apart from this, economic data from the United States (US) revealed that the number of people applying for unemployment benefits, as reported by the US Bureau of Labor Statistics (BLS), decreased to less than 200,000. This indicates that the labor market remains stable. This indicates that the labor market remains tight, justifying further action by the Fed. The number of initial jobless claims increased by 192,000, below the 205,000 expected by experts. Housing data, including construction starts and building permits, also beat expectations, indicating the economy remains strong despite the Federal Reserve’s aggressive tightening cycle.

Lately, the Mexican peso gained ground against the US dollar (USD), which according to the Dollar Index fell 0.33%, settling at 104,397. As sentiment improved, the USD/MXN pair fell from 19.7986 to a daily low of 18.8812.

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US Treasury yields are rising, with the 10-year Treasury yield rising six basis points to 3.522%. By the next meeting, the odds that the Fed will raise 25 basis points in money market futures have gone from 45.4% to 83.4%.

What to pay attention to?

Industrial Production, Capacity Utilization and Consumer Sentiment from the University of Michigan (UM) will be published in the US economic calendar. Traders will be watching the Federal Open Market Committee’s (FOMC) monetary policy decision the following week.

USD/MXN Technical Levels


Last price today 18.9022
Today Change Daily -0.0610
today’s daily variation -0.32
today’s daily opening 18.9632
daily SMA20 18.3584
daily SMA50 18.6508
daily SMA100 19.0904
daily SMA200 19.6348
previous daily high 19.0902
previous daily low 18,584
Previous Weekly High 18.5957
previous weekly low 17.8977
Previous Monthly High 19.2901
Previous monthly minimum 18.2954
Fibonacci daily 38.2 18.8968
Fibonacci 61.8% daily 18.7774
Daily Pivot Point S1 18.6681
Daily Pivot Point S2 18,373
Daily Pivot Point S3 18,162
Daily Pivot Point R1 19.1742
Daily Pivot Point R2 19.3852
Daily Pivot Point R3 19.6803

Source: Fx Street

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