USD/MXN steady around 20.30 on a quiet Monday, bullish outlook

Calm market on Monday amid US holiday.
Emerging market currencies remain under pressure on recession fears and higher interest rates.
USD/MXN firm while above 20.20 looking at 20.45.

Matías Salord FXStreet

The USD/MXN is practically unchanged on Monday, hovering slightly below 20.30, holding onto last week's gains. With US markets closed, price action will likely remain limited.

The bias in USD/MXN continues to point to the upside. While above 20.20, a test of 20.45, the next strong barrier seems likely. Above the next resistance is located at 20.70. On the flip side under 20.20, the strong support lies at 20.05, followed by an uptrend line at 19.90.

Week ahead

Risk sentiment will likely continue to be the key driver in USD/MXN. Key events for the week will be the release of the FOMC minutes on Wednesday, the ADP employment report on Thursday and the Non-farm payroll on Friday.

Mexico will report June inflation on Thursday. The annual rate is seen near 8%, reaching the highest since early 2001, well above Banxico’s 2-4% target. “The central bank just hiked rates 75 bp to 7.75% on June 23 and signaled more hikes were needed. Next policy meeting is August 11 and another 75 bp hike seems likely. Looking ahead, the swaps market is pricing in 200 bp of tightening over the next 6 months that would see the policy rate peak near 9.75%. Banco de Mexico minutes will also be released Thursday”, explained analysts at Brown Brothers Harriman.

USD/MXN daily chart

USD/MXN

Overview
Today last price	20.2884
Today Daily Change	0.0280
Today Daily Change %	0.14
Today daily open	20.2604

Trends
Daily SMA20	20.0676
Daily SMA50	20.0519
Daily SMA100	20.1873
Daily SMA200	20.4274

Levels
Previous Daily High	20.4665
Previous Daily Low	20.0921
Previous Weekly High	20.4665
Previous Weekly Low	19.8201
Previous Monthly High	20.7028
Previous Monthly Low	19.4709
Daily Fibonacci 38.2%	20.3235
Daily Fibonacci 61.8%	20.2351
Daily Pivot Point S1	20.0795
Daily Pivot Point S2	19.8986
Daily Pivot Point S3	19.7051
Daily Pivot Point R1	20.4539
Daily Pivot Point R2	20.6474
Daily Pivot Point R3	20.8283

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.

EUR/USD trims gains, back below 1.1800

EUR/USD now loses some upside momentum, returning to the area below the 1.1800 support as the Greenback manages to regain some composure following the SCOTUS-led pullback earlier in the session.

GBP/USD off highs, recedes to the sub-1.3500 area

Following earlier highs north of 1.3500 the figure, GBP/USD now faces some renewed downside pressure, revisiting the 1.3490 zone as the US Dollar manages to regain some upside impulse in the latter part of the NA session on Friday.

Gold climbs to weekly tops, approaches $5,100/oz

Gold keeps the bid tone well in place at the end of the week, now hitting fresh weekly highs and retargeting the key $5,100 mark per troy ounce. The move higher in the yellow metal comes in response to ongoing geopolitical tensions in the Middle East and modest losses in the US Dollar.