- USD/MXN bounces around 17.8040 after falling more than 2,000 points.
- Strong US labor market data and Q1 growth revision lift USD/MXN from 17.7000 to a daily high of 17.8785.
- Focus will now be on Mexico’s first quarter GDP, US durable goods orders and consumer sentiment will report on the USD/MXN exchange rate.
USD/MXN recovers after falling more than 2,000 points below the 20-day EMA, which, acting as a solid price support level, capped losses for the USD/MXN pair amid a momentum of price aversion. risk. Political developments in the US regarding the debt ceiling hike, and upbeat economic data amid political uncertainty in Mexico, were the main drivers of USD/MXN price action. At the time of writing, USD/MXN is rising and trading around 17.8040.
Political uncertainty in Mexico and strong US data fuel USD/MXN recovery
The discussions in Washington show signs of moving forward, according to US President Joe Biden, while Kevin McCarthy, Speaker of the US House of Representatives, added that not “everyone is going to be happy when end of the day” about making some concessions as Democrats and Republicans try to compromise.
Shocks aside, the US economy continues to grow, as evidenced by strong labor market data and revised growth numbers for the first quarter of 2023. Initial jobless claims for the week ending May 20 rose by 229,000, below the 245,000 expected by analysts, while the Gross Domestic Product (GDP) for the first quarter in its second estimate jumped to 1.3%, from 1.1% in the anticipated and estimated data.
Once the US data was released, USD/MXN rose from around the daily low of 17.7000 to a daily high of 17.8785. In particular, the Dollar Index (DXY), an indicator that measures the value of the Dollar against a basket of six currencies, is trading near two-month highs hit during the day at 104.312, putting some ground in between. the 200 day EMA at 103.748 and the current price.
On the other side of the border, the Mexican economic agenda revealed the trade balance of Mexico, which showed a deficit of 2,965 million dollars in April adjusted for seasonal fluctuations, according to the INEGI.
During the week, the USD/MXN pair traded with gains of 0.30%, after two successive weeks of losses, which dragged the pair to new multi-year lows of around 17.4238. However, USD/MXN has rallied more than 2.50% since last week as the pair approaches the psychological 18.0000 mark.
Upcoming events for the USD/MXN
The Mexican economic agenda will feature the final readings of the Gross Domestic Product (GDP) for the first quarter, which are expected to stand at 1% in quarter-on-quarter readings, while compared to last year, the Mexican economy is estimated to grow 3.9%. If the numbers are worse than expected, the pause in Banco de México (Banxico) rates could trigger flows into the safe-haven dollar, sending the USD/MXN pair towards the 18.00 zone. In the United States, Durable Goods Orders, Consumer Sentiment, and University of Michigan Consumer Sentiment are expected to rock the boat on the USD/MXN exchange rate.
USD/MXN technical levels
|Last Price Today||17.8452|
|Today’s Daily Change||0.0450|
|Today’s Daily Change %||0.25|
|Today’s Daily Open||17.8002|
|20 Daily SMA||17.7782|
|SMA of 50 Daily||18.0536|
|SMA of 100 Daily||18.3522|
|SMA of 200 Daily||19.0691|
|Previous Daily High||17.9817|
|Minimum Previous Daily||17.7666|
|Previous Weekly High||17.7978|
|Previous Weekly Minimum||17.4203|
|Maximum Prior Monthly||18.4018|
|Minimum Prior Monthly||17.9329|
|Daily Fibonacci 38.2%||17.8488|
|Daily Fibonacci 61.8%||17.8995|
|Daily Pivot Point S1||17.7174|
|Daily Pivot Point S2||17.6345|
|Daily Pivot Point S3||17.5023|
|Daily Pivot Point R1||17.9324|
|Daily Pivot Point R2||18.0646|
|Daily Pivot Point R3||18.1474|
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.