USD/MXN drops beneath 100-day SMA as US Pres.Trump’s “secret” deal seems to help Mexico
|- Sellers emphasize a good deal to avoid the US tariffs on Mexican products.
- The US CPI is in the spotlight for now.
Mexican Peso (MXN) buyers cheer an expected 90-day grace period from the June 07 trade deal with the US as the USD/MXN pair declines beneath 100-day SMA to 19.1067 ahead of the Europe markets open on Wednesday.
As per the market sources (like VICE news and twitter handle of the New York Times’ photographer Jabin Botsford), the US President Donald Trump’s “secret” deal with Mexico is no more a secret after the media clicked a photo of one-page deal that he waved during early-morning in Asia.
The deal is expected to have two tranches of 45 days for Mexico to tame illegal immigration and also progress on third world asylum status before it gets broke.
Read more here: US Pres. Trump’s “secret” agreement “leaked”, reveals a concession for Mexico
Traders also weigh recent positive tweets from the President Trump that praised his Mexican counterpart while giving less importance to the CNBC news quoting the Mexican foreign minister Marcelo Ebrard as he said that Mexico will consider legislation to accommodate U.S. demands to make Mexico a so-called safe third country for asylum seekers if it cannot stem migration flows in 45 days.
In addition to political plays, the US consumer price index (CPI) numbers for May will also entertain momentum traders. The US CPI is expected to weaken both on MoM and YoY basis but CPI ex-food and energy can increase on a monthly basis while likely registering no change on a yearly format.
Technical Analysis
An upward sloping trend-line since May start at 19.0651 can act as nearby support ahead of dragging the quote to 18.90 and 18.75 multiple support area. Meanwhile, 100-day simple moving average (SMA) near 19.1416 could limit the pair’s rise to 19.33 and then to 1.3618 number including 200-day SMA.
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