- The Mexican Peso hits a new high since May 2016 at 17.23.
- The Dollar Index (DXY) is trying to rebuild after falling to three-week lows near 103.00.
- US CPI eases to 4% vs. 4.1% estimate, focus shifts to Fed.
He USD/MXN it has rebounded strongly after US inflation data moderated the CPI to 4% in May. The pair has first risen to 17.31 to immediately drop to 17.23, new seven-year low. In the last few minutes, however, the cross is trying to regain some ground and is trading around 17.28, flat on the day.
He Dollar Index (DXY) reacted to the data with a rapid decline to 103.04, a new low since May 22either. The US headline inflation moderating to 4% in May from 4.9% in April, improving the forecast of 4.1%, has made investors think that the Fed would stop its rate hike at the meeting tomorrow, Wednesday, which has weighed on the Dollar, which has fallen against the main foreign exchange. At time of writing, however, the hope that the Federal Reserve will keep one last bullet in the chamber has returned the greenback to the area where it traded prior to the release, although it remains some distance from its daily high at 103.62. The DXY is now trading above 103.32, losing 0.29% daily.
The pair’s traders are now waiting to see how the market digests the data and how it interprets the action that the US Federal Reserve may offer tomorrow. He The market expects interest rates to remain unchanged for the first time after ten consecutive meetings of increases, remaining at 5.25%. and possibly weakening the dollar a bit more. Any move other than the pause can lead to broad volatility in the USD/MXN.
USD/MXN Levels
With a trend widely short and long term bearish, USD/MXN is now facing its first support at 17.23, today’s low. Below awaits the zone 17.10/11where are the soils of May and March 2016, respectively, and 17.05, the lowest level recorded in April of that same year. Below awaits the psychological zone of 17.00.
On the rise, the area 17.40/45, where the highs of June 6 and 8 are, now becomes resistance. If exceeded, the crossing can advance towards the surroundings of 17.60, former support and highest level of last week. Higher up there is a barrier in 17.77, ceiling of May 31. A break above would put USD/MXN on course for the zone 17.99/18.00highest level of May 23 and psychological level, respectively.
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.
