USD/MXN: Consolidation range expected to be challenged
|- Quiet session for the US Dollar ahead of the FOMC statement.
- Mexican peso down for the day, but within the familiar range above 19.00.
The Mexican peso is posting small losses against the US Dollar and is among the worst performers on a quiet session, as traders await the FOMC statement.
The Federal Reserve is expected to keep rates unchanged. The tone and statement will be watched closely for signals about how ready is the Fed to ease monetary policy. The greenback traded softly against Emerging markets currencies over the last weeks, mainly because of market participants pricing in rate cuts from the Fed during 2019, not today.
The USD/MXN awaits the outcome moving sideways, as the Mexican peso confirms last week gains but shows lack of strength for rising further. Domestic concerns limit the peso. Next week, the Bank of Mexico will have its board meeting.
Technical outlook
The USD/MXN continues to trade in the 19.10/19.20 range. At the moment it is testing the upper limit but a consolation on top should be expected in order to get a clear signal for the short-term future. It if manages to break and hold on top, a rally to 19.30 and then 19.45/50 could be expected. On the flip side, if the 19.10 support is broker, the Mexican pesos will likely rise further for a test 19.00; below, the critical support stands at 18.90.
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