USD/MXN rises for the third day in a row despite oil rally
The US Dollar is rising for the third day in a row against the Mexican peso. The greenback is recovering ground after falling to the lowest in more than a year last week. The 3% rise in crude oil price is not helping the Mexican currency on Tuesday, the day before the FOMC decision.
USD/MXN correcting higher
The pair today peaked at 17.78, the strongest in a week. From Friday’s low, it has risen 1.65%. Despite the recovery, the trend continues to favor the downside. The pair is testing the resistance area around 17.80 (June lows). A consolidation on top could clear the way for a test of a downtrend line that currently stands at 18.15.
If it holds under 17.80, a retreat seems likely, probably toward 17.45/50, the key short-term support. The bearish trend remains intact from a technical perspective.
Mexico: Inflation starts to slowdown still above target
Yesterday, the INEGI released inflation data. The CPI rose 0.24% during the first half in July. The annual rate stood at 6.28%, below the previous 6.33%. It is the first time in months that the rate shows a decline.
It is a signal that inflation is starting to slowdown. That would remove pressure for another rate hike from the Bank of Mexico. Still, the CPI index remains above the 4% target.
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
