|

USD/MXN drops sharply as the Mexican Peso eyes 17.0000

  • USD/MXN trades at 17.0741, down 0.19%, as the pair slides below the 20-day Moving Average, targeting the psychological 17.0000 level.
  • Mixed US data, including a drop in inflation expectations, leaves investors uncertain about further Fed tightening beyond September.
  • Technical outlook suggests downside risks below the 50-DMA at 17.0079 while reclaiming the 100-DMA at 17.2271 could spur a recovery.

The Mexican Peso (MXN) extends its gains versus the US Dollar (USD), and prolongs its rally to five consecutive days, with USD/MXN bears setting their sight on the 17.0000 psychological level after sliding below the 20-day Moving Average (DMA) at 17.0921. The pair exchanges hands at 17.0741, down 0.19%.

USD/MXN slips further as mixed US data fails to lift the Greenback, while traders eye a packed economic calendar in Mexico next week

Data from the United States (US) so far failed to bolster the Greenback (USD) as inflation expectations dropped the most in two years, as revealed by the University of Michigan (UoM) Consumer Sentiment poll. Inflation is expected to climb at a 3.1% pace, down from August 3.5%, and estimate a 2.7% jump over a 10-year period. Despite America’s optimism on inflation, sentiment fell to 677 below estimates of 69.1, blamed on high food and energy prices.

Before Wall Street opened, Industrial Production in August rose by 0.4% MoM, below July’s 1% increase but above the 0.1% estimated by the consensus, as the US Federal Reserve revealed. That depicts consumers taking a breather as retailers posted limited orders on manufacturers, struggling with higher borrowing costs and uncertainty on demand.

At the same time, the New York Fed revealed its Manufacturing Index, which expanded this month from -21 to 1.9, exceeding forecasts of -10. Given the amount of data posting positive surprises about the US economy, investors remain hesitant that the US Federal Reserve would continue to tighten monetary policy past the September meeting.

Across the border, a scarce economic docket left USD/MXN traders adrift to market sentiment and US Dollar dynamics. Nevertheless, next week’s agenda will be busy, with the release of Private Spending, Aggregate Demand, Retail Sales, Economic Activity, and inflation for the first half of September.

USD/MXN Price Analysis: Technical outlook

The USD/MXN remains neutrally biased despite printing a new multi-month high. After reaching 17.7074, the pair’s pullback could offer buyers a better entry price than last week’s close. However, downside risks remain and emerge slightly below the 50-DMA at 17.0079. Once cleared, a test of the August 28 swing low of 16.6923 is on the cards. On the other hand, if buyers reclaim the 100-DMA at 17.2271, that would exacerbate a recovery towards September’s high of 17.7074.

USD/MXN

Overview
Today last price17.0887
Today Daily Change-0.0215
Today Daily Change %-0.13
Today daily open17.1102
 
Trends
Daily SMA2017.0975
Daily SMA5017.0163
Daily SMA10017.2425
Daily SMA20017.9696
 
Levels
Previous Daily High17.209
Previous Daily Low17.0734
Previous Weekly High17.7094
Previous Weekly Low17.0447
Previous Monthly High17.4274
Previous Monthly Low16.6945
Daily Fibonacci 38.2%17.1252
Daily Fibonacci 61.8%17.1572
Daily Pivot Point S117.0527
Daily Pivot Point S216.9952
Daily Pivot Point S316.9171
Daily Pivot Point R117.1883
Daily Pivot Point R217.2664
Daily Pivot Point R317.3239

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

More from Christian Borjon Valencia
Share:

Editor's Picks

GBP/USD bounces off four-day lows, still below 1.3500

GBP/USD sticks to the bearish tone on Thursday, coming down to the 1.3480 region in the latter part of the NA session. In the meantime, Cable’s weakness comes as investors continue to assess mixed UK data, poor US results, and the persistent uncertainty surrounding the US-Iran conflict.

EUR/USD looks apathetic around 1.1530

EUR/USD reverses Wednesday’s downtick and trades with modest gains in the 1.1530 region following the end of the NA session on Thursday. The pair’s tepid advance comes on the back of the absence of clear direction in the US Dollar despite tensions from the Middle East appear far from alleviated. Later on Friday, investors are expected to monitor the the releases of another revision of GDP figures in the Euroland, US Retail Sales and the preliminary U-Mich gauge.

Gold remains on the defensive below $4,350; downside seems cushioned

Gold trades below $4,350 during the Asian session on Friday and looks to extend the previous day's pullback from the highest level since June 5 as the US-Iran standoff continues to underpin the US Dollar's reserve-currency status. However, reduced bets for an immediate Fed rate hike, amid signs of cooling US inflation, should act as a tailwind for the non-yielding bullion and help limit deeper losses.

Dogecoin reclaims $0.07 support as whales step in
Dogecoin (DOGE) edges above the daily open, trading above $0.070 as of Thursday. While this uptick offers a positive signal, DOGE continues to trade within a broader bearish context, down approximately 12% from its July peak of $0.079. Still, should the $0.070 support level hold, the mild recovery could gather pace, targeting resistance at $0.080 and potentially the key $0.100 threshold.
Why credit markets aren’t pricing $570B of AI debt

Forecasts put global artificial intelligence related debt issuance near $570 billion this year, with roughly $236 billion of it priced by the end of May at four times the prior year's pace. Data centre securitisation alone has gone from about $4 billion a year through 2022 to roughly $10 billion in each of 2023 and 2024, and then $27 billion in 2025.

Why is Crude Oil priced for a reopening the ships haven't made?
Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.