Mexican Bezo continues its gains with the fracture of the US dollar / Mexican bizo for decisive support

• The USD/MXN pair decreases below the simple moving average for 50 days at 20.42, and trades at 20.27.
• Weak US retail sales and sub -components of the weakest product price index (PPI) enhance federal facilitation expectations.
• Retail sales in Mexico, Mexico’s meeting minutes, and GDP for the fourth quarter in the focus focus this week.

The Mexican Biso (MXN) continued its gains against the US dollar (USD), bypassing the main support at the simple moving average for 50 days (SMA) at 20.42 where the USD/MXN pair found acceptance at lower exchange rates. At the time of writing this report, the strange pair is trading at 20.27, a decrease of 0.09 %.

The US -worse retail sales report expected last week USD/MXN pair to decrease amid uncertainty about economic growth in the United States.

Despite the high US consumer inflation data, some of the sub -components of the PPI price index used to calculate the preferred inflation scale of the Federal Reserve (Fed), which is the PCE price expenses (PCE), indicates that prices may target the decrease , Which increases the chances of federal facilitation.

After Friday data, the figures from the Chicago Trading Council (CBOT) indicate that investors have priced 43 basis points (BPS) of facilitation.

Nevertheless, the head of the Federal Reserve Branch in Philadelphia, Patrick Harker, stated that the current state of the economy justifies maintaining a fixed interest rate policy, noting that the monetary policy is now good. He admitted that inflation has remained high and continuous in recent months, stressing that the federal policy position should continue to work towards lowering inflation.

Before this week, the Mexico’s economic agenda will include retail sales data for the last BanXico Bank of Mexico, and GDP data (GDP) for the fourth quarter of 2024.

Daily market engines: Mexican bizo rises despite the pessimistic position of Mexico

• The contrast in the monetary policy between the Bank of Mexico and the Federal Reserve leads to further height in the USD/MXN pair, as the Fed is likely to keep interest rates for a longer period, while the Bank of Mexico is expected to reduce interest rates again by 50 basis points at the next meeting .
• The US dollar index (DXY), which tracks the performance of the dollar against a basket of currencies, has almost changed at 106.77, which constitutes winds of USD/MXN.
• Commercial conflicts between the United States and Mexico remain in the boiler room. Although the two countries had previously found a common ground, the USD/MXN pair traders should know that there is a period of 30 days and that tensions may arise towards the end of February.

Technical expectations for a USD/MXN husband: Mexican bizo rises with a decrease in USD/MXN to less than 50 days moving average

The USD/MXN pair is heading on Monday and approaches the simple moving average for 100 days at 20.24, which, if crossed, can open the door for further decrease. The RSI has turned into a declining direction, indicating that the strange pair may turn towards the psychological level 20.00.

In this case, if sellers pay prices below 20.00, the following support will be the lowest plasting level on October 18 at 19.64, followed by a simple moving average for 200 days at 19.37.

On the contrary, if the USD/MXN pair rises again over the simple moving average for 50 days, then the next resistance will be at 20.50, followed by the highest level on January 17 at 20.90, the level of 21.00, and the highest level since the beginning of the year (YTD) at 21.29.