Towards the beginning of April USDMXN found support into the 12.96/9700 level, which saw the 38.2% retracement of the 2013-14 advance & the prior 2014 low, and has since rebounded to settle comfortably back above the psychological 13.0000 level – This has also been aided by poor economic data out of Mexico:
- March CPI: 3.76% vs exp. 3.79% y/y, but down significantly from 4.23% in Feb.
- Feb. Industrial Production: +0.7% vs. consensus +1.0% y/y
- March Unemployment rate: 4.80% vs. expected 4.46%
- Feb. Retail Sales: -1.7% vs. consensus +0.4% y/y
Tomorrow the Bank of Mexico (Banxico) has their interest rate decision at 10am ET and we (as well as the market) anticipate the bank will keep rates unchanged at 3.50%, largely due to underwhelming GDP growth and falling inflation. As a result, tomorrow’s decision may come off as being more pro-growth (dovish) and thus could lead to a move higher in USDMXN.
Confluence of technical resistance at 13.15/1600:
- Trendline resistance
- 50-day sma
- 100-day sma
Interestingly, daily RSI has already broken above corresponding trendline resistance in advance to price (leading indicator?). Accordingly, we may not only see the aforementioned 13.1500 level tested, but perhaps even broken over the coming sessions. Conversely, should USDMXN break back below the newly created 2014 low at 12.9420, it would negate this near-term bullish bias.
Chart Source: Forex Charts by eSignal
General Risk Warning for stocks, cryptocurrencies, ETP, FX & CFD Trading. Investment assets are leveraged products. Trading related to foreign exchange, commodities, financial indices, stocks, ETP, cryptocurrencies, and other underlying variables carry a high level of risk and can result in the loss of all of your investment. As such, variable investments may not be appropriate for all investors. You should not invest money that you cannot afford to lose. Before deciding to trade, you should become aware of all the risks associated with trading, and seek advice from an independent and suitably licensed financial advisor. Under no circumstances shall Witbrew LLC and associates have any liability to any person or entity for (a) any loss or damage in whole or part caused by, resulting from, or relating to any transactions related to investment trading or (b) any direct, indirect, special, consequential or incidental damages whatsoever.
Recommended Content
Editors’ Picks
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold price sits at all-time highs above $2,230, US PCE eyed
Gold price hit all-time highs at $2,236 on Thursday to finish Q1 2024 with a bang. Most major world markets, including the US are closed due to Holy Friday, leaving volatility around Gold price highly subdued. US PCE inflation and Powell are awaited.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.