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USDMXN Touches Fresh Trend Low Overnight At 16.7078

MEXICO
  • After consolidating the post US CPI weakness below the 17.00 handle last week, USDMXN spent Friday slowly grinding lower and to start this week has registered fresh trend lows of 16.7078. Since then, the moderate risk-off tone has buoyed the pair back to around the 16.80 mark.
  • Overall, recent price action has confirmed a resumption of the primary downtrend and marks a continuation of the bearish price sequence of lower lows and lower highs. The target of 16.7758, the 1.764 projection of the Jun 2 - Mar 9 - Mar 20 price swing, has now been achieved. The 2.00 projection level lies at 16.4472 and will be the next significant support level. Resistance to watch remains much higher at the 50-day EMA, which intersects at 17.3238. A clear break of this average would be required to signal a reversal.
  • Retail sales is the only notable data point this week which should leave the Peso at the mercy of broader global themes as we approach the July 26 FOMC decision.

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