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USD/MXN Rally Running into Key Levels of Resistance

MEXICO
  • USD/MXN is printing a new weekly high headed through the open, with the greenback’s yield-driven gains being reflected across Latam currencies. The pair has extended gains off the Friday low to close to 2.5%. Progress in the pair could slow as prices approach to key resistance levels: the 17.8168 Sep 27 high, and the 17.8227 200-dma.
  • Clearance here would see the pair resume the uptrend off the late July lows and confirm a double bottom reversal pattern on the daily chart. If correct, this price development signals scope for a climb towards 17.9292 next - 50.0% of the Mar 20 - Jul 28 downleg.
  • Mexican leading indicators fell short of previous in August, dropping to 0.08 from 0.11 prior. Private consumption and gross fixed investment numbers fell short of expectations: Private consumption Y/Y 4.0% vs. Exp. 4.7%, Gross Fixed Investment M/M 0.5% vs. Exp. 1.2%, Y/Y 29.1% vs. Exp. 29.5%.

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