USD/MXN Price Analysis: Steady around 18.75, risks tilted to the downside
- A volatile session is expected with the FOMC meeting.
- USD/MXN continues to consolidate near 18.75, below the 20-day SMA.
- A break above 18.90 could trigger more gains for the US Dollar.
The USD/MXN is falling on Wednesday, following the release of US economic data and ahead of the Federal Reserve decision. A 25 basis points rate hike is priced in and the key diver for action would be the outlook presented in the statement and in Powell’s comments. Volatile hours are expected across the FX board.
The daily chart shows the bias in USD/MXN is still to the downside, although losses continue to be limited by 18.75 and technical indicators do not offer clear signs with RSI flat and Momentum approaching 0 from the downside but about to turn south again. A consolidation below the 18.75 area should open the doors to a bearish extension targeting 18.62 initially. The next support is located at 18.55.
Hours ago, the USD/MXN peaked at 18.86, slightly below the 20-day Simple Moving Average, today at 18.88. The area around 18.90 has become a critical short-term resistance area. If the US dollar breaks and holds above, a recovery to 19.00 and more, seems likely. The next resistance stands at 19.10.
Technical levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
