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USDMXN Extending Lows, Banxico QIR Due

MEXICO
  • The USDMXN downtrend remains intact and the pair is extending lower today. The break confirms a recent bear flag formation on the daily chart and this reinforces the current downtrend. Note that moving average studies are in a bear mode set-up, highlighting current sentiment. The focus is on the 18.00 handle before the 2018 lows at 17.9401. The 20-day EMA, at 18.5560, is the first resistance.
  • The focus this afternoon is on the central bank’s quarterly inflation report.
    • Goldman Sachs have noted that in order to calibrate the monetary policy path, they will pay particular attention to the characterization of the balance of risks to inflation (which GS expect to remain biased to the upside) and the list and ranking order of both upside and downside risks to inflation.
    • Barclays also bring attention to the fact that this will not only be the very first time that the newly appointed Deputy Governor Mejía is in an official press conference, but it is also the first time that all five members of the board will be available for a Q&A session after the surprise 50bp hike.

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