USD/MXN keeps falling, moving closer to 19.00


  • Mexican peso rises for the eight-day in-a-row against the US Dollar. 
  • USD/MXN holds bearish tone, drops for the third consecutive week. 

The USD/MXN pair failed earlier today to break and hold on top of 19.20 and turned lower. As of writing, it trades at 19.13, testing Thursday’s low. It holds a bearish tone, as it has been the case over the last three weeks. 

The improvement in risk sentiment across financial markets and a weaker US Dollar pushed USD/MXN to the downside. At the beginning of the month, it was near 20.00, but it turned lower, breaking a week ago the 19.30 barrier, clearing the way to more losses. 

While holding under 19.35, the negative tone is likely to prevail. The next critical support is seen at 19.00/05, a long term uptrend line from 2017 that if broken, could lead to a slide to test the 2019 low at 18.73.  

MXN lower? Banxico to cut further? 

!The MXN’s recent rally in tandem with some improvements on the global trade picture and US official comments on USMCA ratification. Nevertheless, headlines surrounding this topic should continue creating volatility going forward, and we see limited room for a sustained appreciation in the peso from these levels,” explained Luis Hurtado, analysts at CIBC. They maintain their 19.9 USD/MXN year-end forecast, and expect Banxico to cut the overnight rate by 25 bps in November, and by another 25 bps in December.

According to CIBC, the main obstacle preventing Banxico from signaling more aggressive easing was the high core inflation numbers. “However, we expect this to lose relevance as headline inflation drops below target and economic activity indicators suggest a further deceleration in growth.”

More rate cuts from Banxico are widely expecting as inflation continues to slowdown, economic activity stagnates and the Mexican peso remains firm. What is not clear is how fast will it reduce them. Next week, mid-month inflation data for October and August’s economy activity index are due and will offer more information to the Banxico board. 

USD/MXN

Overview
Today last price 19.1733
Today Daily Change -0.0246
Today Daily Change % -0.13
Today daily open 19.1979
 
Trends
Daily SMA20 19.5144
Daily SMA50 19.622
Daily SMA100 19.4122
Daily SMA200 19.2581
 
Levels
Previous Daily High 19.2522
Previous Daily Low 19.1319
Previous Weekly High 19.6403
Previous Weekly Low 19.2686
Previous Monthly High 20.1651
Previous Monthly Low 19.3208
Daily Fibonacci 38.2% 19.1779
Daily Fibonacci 61.8% 19.2062
Daily Pivot Point S1 19.1358
Daily Pivot Point S2 19.0737
Daily Pivot Point S3 19.0155
Daily Pivot Point R1 19.2561
Daily Pivot Point R2 19.3143
Daily Pivot Point R3 19.3764

 

 

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