USDMXN
USDMXN trades 0.01% higher at 19.1172 close to weekly lows ahead of the Central Bank of Mexico interest rates decision The Bank of Mexico in its last policy meeting cut interest rates as expected by markets for the second time since 2014 by 25 basis points to 7.75%. Banxico didn’t provide any forward guidance but the fact that the committee members voted for an interest rate cut and two of them pushed for a larger cut signals that the Central Bank sees the need for monetary policy easing. I believe that Banxico will continue in that direction with one more rate cut in the upcoming months.
Last week the Mexico Core Inflation came in at 0.25%, below forecasts of 0.29% in October, the 12-Month Inflation came in at 3.02% topping expectations of 3%. The Mexico Consumer Confidence dipped from previous 45.3 to 44.1 in October.
On the USDMXN technical side, the momentum is negative for the short term as the pair trades below all major daily moving averages. On the downside, first support for the pair stands at 19.111 today’s low and then at 19.0536 the low from November 4th. In case of a break below that level the way to 18.8735 July lows will be open.
On the upside, immediate resistance stands at 19,1386 today’s high, next resistance is at 19.2643 the 200-day moving average, while more offers will emerge at 19.3798 the 100-day moving average.
Traders must watch the crucial 19.00 mark; a daily close below could trigger more losses toward the YTD lows at 18.74.