The USD/MXN pair continues to trade above the key support level of 19.00 amidst volatile US Dollar movements. Investors are closely watching the Federal Reserve’s expected interest rate cuts and upcoming Mexican Peso reforms that could influence market dynamics.
Currently, the US Dollar Index (DXY) is hovering around 103.00 as speculations grow about the Fed’s aggressive policy-normalization approach. This has led to a decline in 10-year US Treasury yields to approximately 3.90%.
Traders are awaiting the release of US Initial Jobless Claims data for insights into the labor market’s health. Additionally, Mexico’s upcoming constitutional reforms, including changes to the judiciary system, are adding to the market uncertainty.
Technical analysis shows USD/MXN trading within a Rising Channel pattern, indicating a bullish trend. The 20-day Exponential Moving Average (EMA) is trending upwards, supporting the uptrend. The Relative Strength Index (RSI) suggests strong buying momentum in the market.
If the pair breaks above the recent high of 19.61, it could reach new highs near $20 and potentially target the two-year high of 20.50. Conversely, a drop below 19.00 could lead to a retest of the 20-day EMA at 18.70 and the July 5 high at 18.00.
Analysis Breakdown:
- USD/MXN pair trading above 19.00 despite volatile US Dollar movements.
- Fed’s interest rate cuts and Mexican Peso reforms impacting market sentiment.
- Technical indicators suggest a bullish trend with potential for new highs.
- Key levels to watch: 19.61 (resistance) and 19.00 (support).