USDMXN
USDMXN continues higher for the third consecutive day after yesterday the central bank of Mexico surprised with 50 basis points rate cut that brought the target rate at 6% in an attempt to revitalize the economy and increase exports to hardly battered from the coronavirus and crude oil prices drop Mexican economy. That was the third interest rates cut in the last three months for a total of 125 basis points reduction.
Many analysts expect that the easing cycle is not over as the economy deeps into recession. Banxico also announced a $31 billion package in support to the financial system.
Mexico’s economy has been struck amid the coronavirus outbreak as it depends on crude oil and tourism. The Mexican peso is under selling pressure as the sell-off in crude oil intensifies in April. Crude oil price slumped to 20-year lows and as of writing the Brent crude oil is 4.41% higher at 20.44 per barrel, while the WTI crude oil futures for the June delivery trades 26.27% higher at $14.56.
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USDMXN is 0.95% higher at 24.6303 as the correction from record highs stalled at 23.3530 zone amid the turbulence in crude oil markets. The technical outlook for USDMXN remains bullish despite the recent correction, as the last trading sessions making higher highs and higher lows, so any attempt to test the 25.00 recent high can’t be ruled out.
On the upside, the immediate resistance stands at 24.6390 the daily high. A break above might drive USDMXN to 24.8023 the high from April 8. In case the pair breaks higher then the next resistance stands at 25.4650 the high from March 25.
On the flip side, the initial support for USDMXN will be met at 24,2213 today’s low. The next critical support level for the pair stands at 23.9710 the low from yesterday’s trading session. More bids would emerge at 23.3980 the low from April 13.