USDMXN: Consolidation at Recent Highs After Banxico Interest Rates Cut
USDMXN consolidates today around recent highs at 19,5788 amid USD strength across the board. Yesterday the Bank of Mexico cut interest rates for the first time since 2014 by 25 basis points to 8%. Many analysts believe that Banxico will continue in that direction with two more 25bp rate cuts before the year end. In United States the Building Permits Change came in at 8.4% topping expectations of 5.6% in July.
On the technical side the bulls are in control at least for the short term. Immediate support for the pair stands at 19.35 the 200 day moving average while more solid buying will emerge at 19.18 the 50 day moving average. On the upside first resistance stands at 19.75 yesterday’s high while extra offers will emerge at the 19.7820 the high from June 7th. Possible long positions in USDMXN can be initiated targeting 19.70 zone with a stop loss order at 19.37. Bears have to wait for a break below 19.11 that can be a start for another leg lower below 19.00.