USD / MXN forecast: neutral
USD / MXN continues its recent downward pace, returning to a strong support area between 19.87 and 19.67, where sellers really have to struggle with it to reap additional benefits. The pair has been left quite a dollar under control in recent weeks, and as a result, its price has changed dramatically USD comes from recent records. This USD / MXN dynamics has been going on for some time and can be quite obvious when covered by this Dollar index graph (DXY).
There is little economic data on next week’s Mexican calendar, so I expect the pair to continue to be driven by US dollar flows. The last meeting of the Federal Reserve on Wednesday was enough to persuade traders to reject the risks of some of the previous days, but the currency has already started to fall earlier in the week, pushing the USD / MXN back more than 2%, the biggest step last month.
The question now is whether this is only a temporary adjustment or whether it is more of a step. When we see the follow-up, we see vendors targeting the lower end of the range (19.68), although this is not an easy path, especially looking at the complications that the couple has seen in the area over the past three months. If this is achieved, the next key region is likely to be 19.50, as the pair will not be able to touch that region from March 2020, despite various attempts. The pause below could lead to consolidation to the lowest levels of 2020 at 18.50.
Alternatively, if the US dollar is able to rise back, the USD / MXN is likely to trade more than 20 pesos per dollar, with 20.08 likely to be a good resistance test before heading for 76.4% towards Fibonacci at 20.18.
USD / MXN daily schedule
– Written by Daniela Sabin Hathorn, market analyst
Follow Daniela on Twitter @HathornSabin