- USD/MXN has sensed pressure after a recovery move to near 18.45.
- The major looks vulnerable above 61.8% Fibo retracement at 18.40.
- A downward-sloping 50-EMA at 18.50 indicates more weakness ahead.
The USD/MXN pair has retreated after facing barricades around 18.45 in the Asian session. The downside bias for the asset is the outcome of a subdued performance by the US Dollar Index (DXY). The USD Index has refreshed its intraday low below 103.00 as investors are anticipating that the Federal Reserve (Fed) won’t go heavy on interest rates for now amid escalating United States recession fears.
US banks are expected to behave extremely precautionary while disbursing advances to households and businesses after the turmoil in order to justify fresh regulations. Therefore, extreme credit conditions by lenders would slow down overall economic activity and henceforth the overall demand.
Meanwhile, S&P500 futures have extended gains in the Asian session on hopes that expanded emergency lending facility to US banks will provide support to them, portraying a higher risk appetite of market participants.
USD/MXN is hovering near the 61.8% Fibonacci retracement (plotted from near March 09 low at 17.90 to March 20 high at 19.23) at 18.40. The retracement level also acted as a cushion for the pair last week. The major is consolidating below the 50-period Exponential Moving Average (EMA) at around 18.50, which indicates that the short-term bias is favoring the downside.
Meanwhile, the Relative Strength Index (RSI) (14) has slipped into the bearish range of 20.00-40.00, which indicates that the bearish momentum has been activated.
Going forward, a slippage below March 22 low at 18.43 would drag the asset toward March 13 low at 18.24 followed by March 09 low at 17.90.
Alternatively, a break above March 24 high at 18.00 will expose the asset to a 23.6% Fibo retracement at 18.92 and March 20 high at 19.23.
USD/MXN hourly chart
-638154867324940722.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD under pressure below 1.0550 on persistent USD strength
EUR/USD trades deep in the red below 1.0550 on Wednesday. The US Dollar benefits from rising US Treasury bond yields and the cautious market mood, forcing the pair to stay on the back foot. Several Federal Reserve policymakers will be delivering speeches later in the day.
GBP/USD declines toward 1.2650, erases post-CPI gains
GBP/USD loses its traction and retreats toward 1.2650 on Wednesday. Although the stronger-than-expected inflation data from the UK helped Pound Sterling gather strength earlier in the day, the risk-averse market atmosphere caused the pair to reverse its direction.
Gold now retargets the $2,700 region
Following a pullback during the European trading hours, Gold regains its traction and climbs toward $2,650. Escalating geopolitical tensions help XAU/USD stretch higher, while rising US Treasury bond yields limit the pair's upside.
Why is Bitcoin performing better than Ethereum? ETH lags as BTC smashes new all-time high records
Bitcoin has outperformed Ethereum in the past two years, setting new highs while the top altcoin struggles to catch up with speed. Several experts exclusively revealed to FXStreet that Ethereum needs global recognition, a stronger narrative and increased on-chain activity for the tide to shift in its favor.
Sticky UK services inflation to keep BoE cutting gradually
Services inflation is set to bounce around 5% into the winter, while headline CPI could get close to 3% in January. That reduces the chance of a rate cut in December, but in the spring, we think there is still a good chance the Bank of England will accelerate its easing cycle.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.