USD/MXN Price Analysis: Mexican Peso sellers justify Banxico inaction to poke 17.20 resistance
- USD/MXN eyes the first weekly gain in five on Mexican central bank’s status quo.
- Banxico keeps benchmark rates unchanged at 11.25%, as expected.
- Sustained trading beyond 17.15 support confluence keeps USD/MXN buyers hopeful.
- Mexican Peso sellers need validation from one-month-old falling resistance line and US PMIs.
USD/MXN picks up bids to refresh its intraday high near 17.18 as it stays on the way to reversing the mid-week losses amid early Friday. In doing so, the Mexican Peso (MXN) justifies Banxico’s inaction, as well as the broad US Dollar strength, ahead of the preliminary readings of the US S&P Global PMIs for June.
On Thursday, the central bank of Mexico, namely the Banxico, left its benchmark rate unchanged at 11.25% while matching the market forecasts. The same joined hawkish comments from Fed Chair Jerome Powell and the broad rush towards the US Dollar to push back the Mexican Peso buyers who returned to the home on Wednesday.
That said, the USD/MXN pair’s successful break of the 17.15 level comprising the 50-SMA, a one-week-old rising trend line and a downward-sloping previous resistance line from May 23 keeps the buyers hopeful. Adding strength to the upside bias is the RSI (14) line which is above 50.00 but not overbought.
With this, the Mexican Peso pair jostles with a one-month-old falling trend line resistance, around 17.20 by the press time.
In a case where the USD/MXN manages to cross the 17.20 hurdle, which is more likely, the 100-SMA can challenge the pair buyers around 17.30.
On the contrary, a downside break of the 17.15 support confluence will quickly drag the Mexican Peso pair to the monthly bottom surrounding 17.00, which is also the lowest level since December 2015.
USD/MXN: Four-hour chart
Trend: Further upside expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
