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Peso Continues Impressive Performance, USDMXN Below Support

MEXICO
  • No immediate impact for MXN following the data as is usually the case. The data will be welcomed by central bankers and should bolster the likelihood of Banxico stepping down to a 25bp hike in March.
  • The Mexican peso came roaring back on Wednesday with any pullbacks continuing to be well absorbed. Overall, the technical downtrend for USDMXN remains intact, and the pair’s bearish extension last week confirmed a recent bear flag formation on the daily chart, reinforcing the bearish theme.
    • Price is once again below 17.9401, the 2018 low, and a sustained break of this level opens the potential for a move to 17.5746, the Aug 25 2017 low and 17.4503, the 2017 lows.
    • Short-term resistance moves down to 18.2857, the 20-day EMA.

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