USDMXN bounces and affirms above 19.50, easing bearish pressure

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  • USDMXN rises for a second day, recovering from lows in months.
  • Mexico: inflation falls from 8.70% to 8.41% in October.
  • Banxico announces its monetary policy decision on Thursday.

USDMXN is rising for the second day in a row and reclaimed the key 19.50 level. The pair reached as high as 19.60 on Wednesday, against a stronger dollar in the market.

On Tuesday, USDMXN hit 19.40, the lowest level since March 2020, before beginning a bullish bounce. The dominant trend remains down, but a period of consolidation could be expected ahead, possibly between 19.80 and 19.50.

Elections and inflation

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The mid-term elections in the US have not yielded definitive results yet. In any case, everything seems to indicate that there will be no major surprises and the Republicans will gain control of the House of Representatives and it remains to be seen what will happen to the Senate. The Republican victory is turning out to be less overwhelming than expected.

The market does not react significantly to the results and prepares for what will be the publication of the US October inflation data on Thursday, which is expected to have a broad impact throughout the market. The expectation is that the annual rate stands at 8% after a monthly rise of 0.7%.

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In Mexico it became known on Wednesday that the Consumer Price Index rose in October 0.57%, slightly lower than expected. The annual rate went from 8.70% to 8.41%. The core CPI advanced 0.63% and the annual rate climbed to 8.41%, a new maximum in decades.

Thursday will be the meeting of the Board of Governors of the Bank of Mexico. A rise in the benchmark interest rate of 75 basis points from 9.25% to 10.0% is expected. The published inflation data has a double impact for the central bank authorities since they will celebrate the drop in the main index, but they will be concerned about the new advance in the core one.

Technical levels

USD/MXN

Panorama
Last Price Today 19,587
Today’s Daily Change 0.0534
Today’s Daily Change % 0.27
Today’s Daily Opening 19.5336
Trends
20 Daily SMA 19.8454
50 Daily SMA 19.9735
100 Daily SMA 20,128
200 Daily SMA 20.1785
levels
Previous Daily High 19.5679
Previous Daily Minimum 19,434
Previous Maximum Weekly 19.9193
Previous Weekly Minimum 19.4591
Monthly Prior Maximum 20,177
Previous Monthly Minimum 19,785
Daily Fibonacci 38.2% 19.5168
Daily Fibonacci 61.8% 19.4852
Daily Pivot Point S1 19.4558
Daily Pivot Point S2 19,378
Daily Pivot Point S3 19.3219
Daily Pivot Point R1 19.5896
Daily Pivot Point R2 19.6457
Daily Pivot Point R3 19.7235

Source: Fx Street

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