An
incredible rise of the US Dollar versus the Mexican Peso after the inflation
data out of the United States came out higher than expected, raising the odds
of seeing more stimulus cuts by the FED and probably having an interest rate
hike sooner than expected. The economic stimulus that the FED had been
implementing has helped emerging market currencies like the Mexican Peso and
the Brazilian Real, but now that that stimulus is being cut down, these
currencies are feeling the heat and have been dropping versus the greenback
substantially.
As we can
see on the daily chart below of the USD/MXN, the pair is getting closer to the
13.1300 psychological level, which has been a very good resistance in the past.
A visit to that level may give us a bounce to the downside and if that happens
and the pair retraces back to the 200 Day Exponential Moving Average, blue
line, then we may see a bounce to the upside from there.
Today we have the Fed Interest Rate Decision and Fed's Monetary Policy Statement and press conference may influence the volatility of the USDMXN pair and set the tone for the rest of the month.
ReplyDeleteAfter the draw with Brazil in the case of Mexico pass the next phase of the World Cup, revitalizes the economy and the Mexican peso will recover ...
ReplyDeleteGreat info man .thanks.
ReplyDeleteGood point! I´ll be watching to those levels.
ReplyDeletenice move
ReplyDelete