- The Mexican peso is favored by market context ahead of US data.
- The US CPI is coming and the Fed meeting starts.
- USD/MXN tests the 100-day moving average and levels above 19.80.
USD/MXN completed two days of gains on Monday and had its highest daily close since late October just above 19.80, a key technical level. The Mexican peso is recovering ground slightly on Tuesday, before key US data supported by the rise in the stock markets.
The market is focused on what will be the US inflation data for November. The market consensus is that the annual rate of the Consumer Price Index (CPI) goes from 7.7% to 7.3%. This would be the lowest in 11 months, although well above the Federal Reserve’s target.
After this the focus will go to the fed who will announce the monetary policy decision on Wednesday. Thursday will be the turn of the Bank of Mexico. In both cases, increases of 50 basis points are expected.
Both the US inflation data in minutes, with the decisions on Wednesday have great potential to affect the market, including USD/MXN.
The pair has been bouncing from its lows in months and is beginning to consolidate above 19.80, which leaves the doors open to further rises. Monday’s peak was at 19.92, the intraday high since Oct. 31. The 100-day moving average is passing through 19.91. A close above could send USD/MXN to a previous range of 19.80 and 20.15/20.
If rejected above 19.80, the Mexican peso could regain strength, leading USD/MXN to test support at the 19.55 zone.
technical levels
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.
