- USD/MXN remains low after two days of recovery.
- Sustained trading below the 100 EMA and the break below the weekly support line favor confirmation of the bearish chart pattern.
- Banxico is not likely to announce interest rate changes, but a surprise could break key support at 17.00.
- Mexican Peso sellers remain off the table below 17.25.
USD/MXN fell in the American session yesterday to 17.10 after previously reaching a nine-day high of 17.25. Today, Thursday, on the eve of Banxico’s decision on interest rates, the pair is trading at 17.13, gaining 0.10% daily.
The USD/MXN pair remains on the sellers’ radar as it retraces the bearish double top chart formation ahead of the Banxico announcements. To reinforce the downtrend, the cross continues to trade below the 100 EMA, and has broken down the uptrend line from a week ago, which was crossed around 17.15.
However, it should be noted that levels below 50.0 of the RSI line (14) suggest a bottom has been reached and therefore last week’s multi-month low around 17.00 gains much attention as key support.
Should Banxico surprise markets with hawkish moves, the USD/MXN pair can quickly break the 17.00 support and confirm the bearish “double top” chart formation, which in turn presents a theoretical target close to 16.75.
Alternatively, a break above the 17.15 confluence of resistance, mentioned above, is not an open invitation to Mexican Peso sellers, as the double top near 17.25 may challenge the USD/MXN pair higher.
USD/MXN: Hourly chart
Trend: Downtrend
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.
