- The dollar slows the rises on the day of the start of the Fed meeting.
- USD/MXN biased up but needs to break 20.50 to enable more upside.
The USD/MXN is falling moderately on Tuesday, after not being able to overcome 20.50 and before a brake in the advance of the dollar, at the start of the Federal Reserve meeting. The pair trades at 20.37, the day’s low, with an intraday bearish tone, although still with dominant upside risks.
No power with 20.50
The USD/MXN remains unconfirmed above the 20.45/50 zone, which is a relevant resistance and also where the 200-day simple moving average is passing. In case of a close above, the pair would be positioned for more rises, with the next barrier at 20.70.
The setbacks at the moment look corrective. The immediate support is around 20.30 and then the 20-day moving average appears at 20.13, although already at 20.20 a horizontal support appears. This implies that a fall below 20.10 would strengthen the Mexican peso from a technical point of view.
looking at the fed
The market’s attention is focusing on the meeting of the fed which starts on Tuesday. A 50 basis point hike in the Fed Funds rate and the start of the central bank’s balance sheet adjustment are expected to be announced on Wednesday. In Mexico, the Banxico meeting will be on May 12.
The treasury bond yields They fell on Tuesday, but they are in the zone of maximums in years, which contributes to continue giving support to the dollar. DXY remains at highs in years.
In addition to the Fed, important US data is coming with the ADP Private Employment on Wednesday and Non-Farm Payrolls on Friday.
Technical levels
Source: Fx Street
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