USD/MXN: Upside capped again, remain sideways above 19.00
- Mexican peso ends week little change versus US dollar around 19.10.
- Next week: Banxico meeting, Fed talk and US retail sales.
The USD/MXN is hovering around 19.10, around the same level it had a week ago. The pair continues to move sideways, consolidating after the bearish run from above 20.00 toward a long term trendline, around 19.00.
The improvement in risk sentiment helped limit the upside over the week in the USD/MXN while on the downside, a stronger US dollar amid higher US yields, added support. The tone around US/China trade talks and expectations regarding US monetary policy continue to be a relevant driver. The Mexican peso was unaffected by the current turmoil in several Latin American countries.
Next week, several FOMC officials are scheduled to speak. Those speeches could have an impact on Fed rate expectations. Data to be released in the US includes the retail sales report. In Mexico, the critical event is the Board meeting of the central bank. Banxico is likely to cut rates again. If delivers a 25bps cut, the focus will be on the statement and the votes, looking at hints for the future.
Technical outlook
The USD/MXN continues to trade in a range, with a strong support around 19.00, a confluence of a horizontal level, recent lows and a long-term uptrend line. A consolidation below would likely clear the way for a test of the 2019 low at 18.74.
On the upside, the key resistance lies at 19.20/25 that capped the upside over the last few days; also the 20-day moving average stands there. A daily close above 19.25 would strengthen the outlook of the US dollar.
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.
