- Mexican peso continues to advance against the dollar.
- USD/MXN with a negative bias, targeting the 200-day moving average.
- Inflation in Mexico rises more than expected in July, annual rate reaches 8.15%.
USD/MXN is falling again on Tuesday and is trading at 20.20, the lowest level in a month. Emerging market currencies are advancing against the dollar.
USD/MXN break of 20.30 enabled further downside. The next support can be seen at 20.15, which as well as being a horizontal level contains the 200 day moving average. Below the next level is at 20.05.
The short-term negative bias is expected to hold as the pair remains below the 20.50 area, which contains the 20-day moving average.
Inflation, then Banxico
On Tuesday it became known that inflation in Mexico rose at an annual rate of 8.15% in July, the highest level since December 2000. This occurred after an increase in the consumer price index of 0.74%, higher than the 0.72% expected.
In this way, the expectation grows for a new rise of 75 basic points by the Bank of Mexicowhich will have the meeting of the Governing Board on Thursday.
In the US, the focus is on the inflation data that will be published on Wednesday. Friday’s employment figures, better than expected, increased the expectations of the continuation of an aggressive tightening by the Federal Reserve. The inflation data can be key and have a broad impact on the market.
Technical levels
Source: Fx Street
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