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USDMXN Jumps to Monthly Highs On Upbeat U.S. Manufacturing PMI


USDMXN hits monthly highs as the rebound from six-month lows continue and might gain strength as the USDMXN breached above the 200-day moving average. Weak Mexico retail sales also weigh on the Mexican Peso. 

United States Manufacturing PMI Beat Expectations

United States Markit Manufacturing PMI came in at 53.5 in September topping the forecasts of 53.2. The Markit Services PMI registered in at 54.6 slightly below the expectations of 54.7 while the Markit Composite PMI dipped from previous 54.6 to 54.4 in September. The United States Housing Price Index came in at 1%, beating the forecasts of 0.5% in July. 

Mexico Retail Sales Drop 

The Mexico retail sales came in at 5.5% below the expectations of 6.1% while the previous month reading was at 7.8%. The yearly reading for the Mexico retail sales registered in at -12.5% below the estimates of -12% the previous reading was at 16.6%. 

Banxico Monetary Policy Decision Tomorrow Will Drive the Pair

Investors wait for the Fed’s Jerome Powell speech in the Congress while tomorrow the focus will be on the Banxico monetary policy decision. Analysts expect the Mexico central bank to cut interest rates by 25 basis point to 4.25%. In the August policy meeting, Banxico cut the rates for the tenth consecutive meeting by 50 basis point to 4.5%. 

USDMXN Daily Technical Analysis 

USDMXN upward move accelerates today as the pair breached above the 50-day moving average. USDMXN technical picture has improved and as of writing adds 1.94% at 22.1166, hitting the highest level since August 28. 

Now the pair faces the strong resistance at the 100-day moving average at 22.3256. A break above would meet the next supply zone at 22.9316 the high from August 4.  

On the downside, initial support is at 21.9524 the 50-day moving average. The next strong level is at 21.6589 the 200-day moving average. A break below might challenge 21.0277 the low from September 21. 

USDMXN Daily Chart