Mexican peso struggles near 21.50, Trump's inauguration eyed

The Mexican peso struggles vs. its American peer on Monday, after last week's pullback, caught by surprise dollar bulls. Around 21.50, the peso seems to slow down and lack the bullish narrative to extend its gains.      

Currently, USD/MXN is trading at 21.68, up +0.97% on the day, having posted a daily high at 21.69 and low at 21.47.

The 100-day madness

What's next after Trump's inauguration? The answer is simple; 100-days where markets conditions may change from one day to another. At the same time, those can quickly become the most critical and dangerous one-hundred days in political and economic history for the United States and trade partners. That's Mexico case among other international players (Canada, U.K., and China). 

The Telegraph reports, "A Trump presidency would break from the traditional Republican commitment to free trade, imposing a set of protectionist policies to close America's economic borders. He will immediately announce his intention to "renegotiate" the North American Free Trade agreement with Canada and Mexico."

The report concludes on the Trade Agenda outlook, "He would cancel participation in the Trans-Pacific Partnership, a controversial trade arrangement with 12 countries. The pact aims to deepen economic ties between these nations, slashing tariffs and fostering trade to boost growth. But critics argue that it will also intensify competition between countries' labour forces." 

USD/MXN Levels to consider

There is a short-term consolidation to appreciate around 21.50 range and lower. If the dollar were to receive further aid via effective trade measures or any other bullish rhetoric from Donal J. Trump (even a less than 140 character tweet), then USD/MXN found an interesting bottom to target back 22.00 round figure.  

To the downside, on the medium-term, supports are aligned at 20.68 (near 50-SMA), 19.76 (near 100-SMA) and finally 19.00 (near 200-SMA). To the upside, resistance levels are aligned up at 21.83 (Jan. 13 high) and then, 21.96 (Jan. 12 high). After these two levels, a close an open above the 22.03 figure, should attract buyers expecting further gains towards 23.00 and above. 

Trump's inauguration on Friday