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U.S. Dollar / Mexican Peso

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USDMXN trade ideas

USD/MXN Nears Critical Support LevelOver the past four trading sessions, USD/MXN has declined by more than 2% in favor of the Mexican peso. The current bearish move has brought the price closer to the lower boundary of the existing sideways range seen on the chart. This recent selling pressure has been driven by mixed U.S. inflation data released last week and the lack of volatility in the U.S. dollar due to the U.S. holiday, allowing the peso to dominate the market in the short term. Sideways Range Holds At the moment, USD/MXN continues to trade within a well-defined neutral range between the 20.90332 resistance level and the 20.09472 support level. So far, the bearish momentum has been strong enough to push the price closer to the key support zone, and as long as selling pressure persists, there is a higher likelihood of a downside breakout in the short term. MACD Indicator Currently, both the MACD lines and the histogram are crossing the neutral 0 level. This could signal the start of fresh bearish strength if price action remains below this level in the coming sessions. Selling pressure may gain further relevance as the histogram moves further away from the neutral zone. TRIX Indicator For the first time in months, the TRIX indicator is consistently approaching the 0 neutral level , reinforcing bearish dominance in the short term. If the TRIX crosses below 0, the moving average bias could shift fully bearish, strengthening the peso’s momentum. Key Levels to Watch 20.90332 – Key Resistance: Major resistance level, marking the highest price levels reached in recent months. A return to this level would confirm a recovery of bullish sentiment, reinforcing the current sideways channel. 20.43791 – Near-Term Resistance: Coincides with the Ichimoku Cloud barrier and the 50-period moving average. If the price retraces to this level, it could invalidate the current bearish pressure and open the door for a potential upside correction. 20.09472 – Critical Support: Lower boundary of the current range. If sellers break below this level, it could confirm the start of a new downtrend in the short term. By Julian Pineda, CFA – Market Analyst
by FOREXcom
USD/MXN: Testing Support Within a Tight RangeChart Analysis: USD/MXN remains stuck in sideways consolidation, with price action respecting both rising trendline support and overhead resistance at 20.80. 1️⃣ Support and Resistance Levels Holding: Key resistance at 20.80 has repeatedly capped rallies, preventing a breakout. Trendline support near 20.40 continues to hold, but a breakdown could open the door to further downside. 2️⃣ Moving Averages Provide Guidance: 50-day SMA (20.42): Acting as a dynamic support zone. 200-day SMA (19.28): Remains well below, reinforcing a longer-term bullish bias. 3️⃣ Momentum Indicators Show Lack of Conviction: RSI: 48.64, indicating neutral momentum with no clear direction. MACD: Barely above zero, reflecting a lack of strong trend momentum. What to Watch: A breakout above 20.80 could trigger fresh upside, targeting 21.00+. A break below 20.40 would signal a potential reversal toward the 20.00 handle. Sideways price action remains dominant, awaiting a catalyst for direction. USD/MXN continues to coil within a tight range, leaving traders watching for a decisive breakout or breakdown. -MW
by FOREXcom
USDMXN at Key Support - Potential Buy SetupOANDA:USDMXN is currently trading at a major demand zone, where buyers may step in to support the price. This level has historically acted as a strong support area, leading to bullish reversals. If the price confirms a rejection from this demand zone, we could see a move upward toward the 20.4440 target level. A bullish reaction from this zone would align with the expectation of a short-term correction within the broader market structure.
Long
by DanieIM
1
Banxico Accelerates the Pace of NormalizationThe recent monetary policy decision by the Bank of Mexico (Banxico), which reduced the interest rate by 50 basis points to 9.5%, marks a significant moment in the current cycle of monetary normalization. Although the market consensus already anticipated a cut, the 50-basis-point magnitude reflects the majority of the Governing Board members’ confidence that domestic and external economic conditions allowed for a more substantial adjustment. It is worth noting that the vote was not unanimous, as Deputy Governor Jonathan Heath favored a smaller cut of 25 basis points. This move is in line with the message Banxico issued in December 2024, when it announced that if inflation trends remained favorable and economic conditions permitted, it would consider accelerating the pace of rate cuts. It is the first time in this cycle that the rate has been lowered by 50 basis points, following five 25-basis-point cuts in 2024. The inflation trend has been a key factor: with headline inflation finally falling below 4%—a level not seen since 2021—the central bank has additional room to ease monetary policy without losing sight of its 3% target. In addition to the positive news on prices, the Mexican economy is showing signs of weakness. During the fourth quarter of 2024, GDP contracted by -0.6% quarter-on-quarter, the first drop since 2021. Moreover, consumer confidence fell again, reaching 46.7 in January 2025, indicating increased caution in household spending. These factors, along with the temporary pause in tariffs by the United States, provided a relatively stable exchange environment that made a more aggressive cut feasible. Looking ahead, much of the effectiveness of this less restrictive monetary stance in boosting the economy will largely depend on the evolution of external risks, particularly trade negotiations with the United States. In this context, it will be crucial to monitor whether inflation remains within the target range and whether the peso maintains exchange rate stability. If new external pressures arise or inflation deteriorates, Banxico would very likely need to reassess the pace of upcoming cuts. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
by Pepperstone
Mexican Peso at a Key Monetary Policy MomentIn a global environment still marked by uncertainty, the Mexican peso is showing relative stability ahead of the imminent monetary policy decision by the Banco de México (Banxico). The expectation of a 50 basis points cut in the interest rate this month reflects a strategic calculation: to seize an opportunity to continue stimulating the economy while the relative exchange rate stability permits it. I personally believe that Banxico’s decision is based on two key factors. First, general inflation fell below 4% in the first half of January, levels not seen since 2021, bringing the central bank closer to its primary inflation target. Second, a one-month pause in trade tensions between Mexico and the United States has provided the peso with some relief, avoiding additional pressures that would complicate a more extensive monetary easing. I believe this is the right time for Banxico to further support growth with a more significant normalization of rates. It is important to emphasize that the rate cut contrasts with the stance of the Federal Reserve (Fed), which maintains a restrictive tone after noting in January a strong labor market and persistent inflationary pressures. This divergence, however, could eventually put pressure on the peso against the dollar. Nonetheless, Banxico seems confident that the maneuvering room gained from the recent stability of the MXN compensates for the risks. While Banxico acts, consumer confidence in Mexico fell to 46.7 points in January, its lowest level since October 2023. The deterioration in future economic outlooks (50.3 vs. 51.2 in December) and the decreased willingness to purchase durable goods (29.9 points) reveal growing pessimism. Although the perception of the current situation in households improved slightly (51.5), this data reinforces the urgency for policies that stimulate domestic consumption, aligning with the need to provide a less restrictive monetary policy environment that can drive greater economic dynamism. Beyond national borders, the postponed—though not non-existent—trade tensions and the potential escalation of protectionism in the U.S. add layers of complexity. A dollar strengthened by aggressive U.S. policies could unbalance the peso, limiting Banxico's room to maneuver. Banxico faces the challenge of stimulating an economy showing signs of fragility without triggering currency pressures in a volatile global scenario. The window of opportunity exists, but it is narrow: any shift by the Fed or changes in trade relations could considerably limit it. Banxico’s next move is not just about interest rates, but about navigating increasingly turbulent international waters. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
by Pepperstone
Mexican Peso Under PressureThe Mexican peso remains in a delicate position, struggling with a series of internal and external factors that exert pressure on its value. Despite a weaker U.S. dollar midweek, the local currency has faced notable downward pressures, reflecting the complex economic landscape that Mexico is navigating. Global trade uncertainty continues to be a key factor. While the extension of 25% tariffs on Mexican products by the United States provides some relief, the latent threat of new protectionist measures remains. This trade tension environment limits the peso’s recovery margin, given the nervousness among investors and businesses. On top of this global scenario, internal challenges also impact the peso’s behavior. Recent economic data paints a mixed picture, with both strengths and weaknesses that raise doubts about the resilience of the Mexican economy. Gross fixed investment, a key indicator of economic health, showed a year-over-year contraction of 0.3% in November, according to INEGI data. Although this decline is moderate compared to previous months, it reflects a persistent weakness in the construction sector, one of the traditional economic drivers. However, spending on machinery and equipment continues to show solid growth, suggesting that investment in other sectors remains dynamic. In contrast, private consumption, another fundamental component of domestic demand, has grown by 0.7% annually. However, a deeper analysis reveals an increase in the consumption of imported goods, which could generate pressure on the trade balance and further impact the peso, especially amid U.S. trade uncertainty and at-risk exports to its northern neighbor. Market attention is now focused on the decision by the Bank of Mexico (Banxico) in its upcoming monetary policy meeting. A rate cut is expected, but its magnitude will be key in determining the peso’s impact. An aggressive 50-basis-point cut could exert additional pressure on the Mexican currency. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
by Pepperstone
USDMXN Approaching Resistance – Potential for Short-Term DropOANDA:USDMXN is approaching a key resistance level, a zone where sellers have previously stepped in to drive prices lower. If the resistance holds and a rejection occurs, the market could see a short-term pullback toward the 20.62025 level, a logical target based on recent price swings and momentum shifts. Traders should watch for confirmation patterns such as bearish candlesticks or rejection wicks at the resistance level. This could signal a potential move lower. Conversely, a break above this resistance would invalidate the bearish scenario and could indicate continued bullish momentum. This setup presents a potential short-term opportunity. Feel free to share your insights or alternate perspectives in the comments below!
Short
by DanieIM
3
Mexican Peso Holds Strong Amid Adverse DataThe Mexican peso is managing to hold strong in a key trading session, showing relative stability amid growing economic uncertainty. However, recent Gross Domestic Product (GDP) data from Mexico paints a slowing growth picture, raising serious concerns about the currency’s medium- and long-term outlook. While the peso has managed to remain relatively stable against the U.S. dollar, even showing gains, this resilience could be an illusion. The 0.6% GDP contraction in the fourth quarter of 2024, combined with an annual growth rate of just 0.6%, reveals a weakening of the Mexican economy, especially in the primary and industrial sectors. The peso’s stability is mainly a reflection of the weakness of the U.S. dollar across the board during the session. The GDP contraction in the last quarter and the slowing annual growth are undoubtedly warning signs that cannot be ignored. External factors also play a crucial role in the peso’s performance. U.S. economic data, from Mexico’s largest trading partner, could put pressure on the currency. U.S. GDP growth in 2024 stood at 2.3%, a pace of expansion that has slowed in the last quarter, somewhat weakening the narrative of U.S. economic exceptionalism that dominated the first half of January. Naturally, a slower economic expansion in the U.S. could have additional indirect implications for the Mexican economy. Additionally, we cannot rule out the impact of a more aggressive monetary easing policy next week from Banco de México, which could adopt a more “dovish” stance in response to economic slowdown. Another risk factor for the peso is the potential imposition of tariffs by the U.S. on Mexican products. The implementation of these tariffs could have a significant negative impact on the Mexican economy and trigger a greater depreciation of the peso. The threat of tariffs is an uncertainty factor that weighs on the peso. While we hope it does not materialize, we cannot underestimate its potential impact on the Mexican economy and market confidence. In this context, the Mexican peso is at a crossroads. While the short-term stability of the MXN is a sign of resilience, both internal and external risks could test the currency’s strength in the coming weeks and months. The evolution of the U.S. economy, Banco de México’s monetary policy, and the threat of tariffs will be key factors to monitor closely. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
by Pepperstone
1
USD/MXN: Is the Uptrend Breaking?Chart Analysis: USD/MXN has broken below a key ascending trendline (blue), suggesting potential weakening in the bullish momentum observed since mid-2024. 1️⃣ Key Support Breakdown: The pair closed below the ascending trendline at 20.25, signaling potential bearish pressure. The next key support lies near 20.00, a psychological level and a significant horizontal zone. 2️⃣ Moving Averages: 50-day SMA (blue): At 20.38, acting as dynamic resistance following the breakdown. 200-day SMA (red): Positioned lower at 19.05, confirming a longer-term bullish structure remains intact despite recent weakness. 3️⃣ Momentum Indicators: RSI: At 43.19, showing bearish momentum but not yet oversold. MACD: Hovering near the zero line with a slight bearish crossover, indicating waning upward momentum. What to Watch: A sustained move below 20.00 could confirm a deeper bearish correction toward the 200-day SMA. A recovery back above the trendline and 20.38 could invalidate the bearish breakout and signal a continuation of the bullish trend. USD/MXN's near-term direction hinges on its ability to either hold above 20.00 or reclaim the broken trendline for renewed bullish momentum. -MW
by FOREXcom
USD/MXN breaks trend line ahead of Trump speechThe USD/MXN has broken its bullish trend line, and has now moved back below the key 20.500 level. Is this a turn in the tide? The Mexican peso has enjoyed a relief rally along with other risk assets in the last few days, but whether or not it can rise further will depend partly on any new tariff announcements from Trump, and their scale... Trump's Speech at Davos in Focus: Tariffs and Taxation on the Horizon? Trump’s highly anticipated address at the World Economic Forum in Davos at 11:00 AM ET is set to grab the market’s attention. Investors will be closely analysing his comments for any further signals on tariffs, economic policies, and international tax matters. While Trump has refrained from imposing blanket tariffs so far, he’s kept the market guessing with his mentions of potential tariffs targeting Canada, Mexico, Europe, and China. However, no firm decisions have been made yet, leaving investors in a holding pattern as they await further clarification on his stance. Jobless Claims Rise: Softening Signs in the Labour Market? On the economic data front, US jobless claims came in higher than expected at 223K, up from 217K the previous week, and above the forecast of 220K. This marks the second consecutive week that claims have risen more than anticipated, suggesting a potential softening in the jobs market, at least in the near term. The slight uptick in claims could raise questions about the strength of the labour market and add to market uncertainty as traders await more data and policy direction. By Fawad Razaqzada, market analyst with FOREX.com
Short
by FOREXcom
Mexican Peso Under Renewed PressureThe Mexican peso is once again under pressure against the U.S. dollar, approaching multi-year lows during certain moments of the day. This depreciation is driven by a confluence of internal and external factors, generating uncertainty in Mexican markets. The USD/MXN exchange rate has risen by 0.7%, reversing part of the initial optimism following the absence of executive orders on tariffs during Donald Trump’s first day of his new presidency. However, the subsequent mention of potential 25% tariffs on Canada and Mexico starting February 1 has added volatility to the market, putting further pressure on the peso. If implemented, this potential measure would significantly impact the Mexican economy, given its close trade relationship with the United States. The shadow of tariffs looms over the peso, generating risk aversion that weakens the currency. On the domestic front, recent economic data paints a challenging picture. Retail sales have declined by 0.1% month-over-month, marking two consecutive months of drops. Even more concerning is the 1.9% year-over-year decline in November 2024, the seventh consecutive month of contraction, exceeding market expectations of a 1.2% drop. This broad-based decline in domestic consumption, with sharp drops in key sectors such as supermarkets, department stores, healthcare products, and hardware, suggests the presence of structural issues affecting internal demand. While e-commerce and home goods show some increases, they fail to offset the weakness in other sectors. The persistent decline in retail sales reflects a underlying weakness in domestic consumption, raising questions about economic dynamism. Falling inflation opens the door for a possible rate cut by Banxico in its February meeting. This more accommodative monetary stance contrasts with expectations of a more restrictive monetary policy by the U.S. Federal Reserve, potentially narrowing the interest rate differential between the two economies and further pressuring the peso. This divergence in monetary policies adds an additional layer of uncertainty for the exchange rate. The Mexican economy's high dependence on trade and remittances from the U.S. makes it particularly vulnerable to external shocks. The imposition of new tariffs or stricter immigration policies could negatively impact public finances and further weaken domestic consumption. In this context, attention focuses on upcoming economic policy decisions in both Mexico and the United States, which will be crucial for the Mexican peso’s trajectory in the short and medium term. In the long run, the peso’s strength will largely depend on Mexico’s ability to navigate this period of uncertainty in its trade relations.
by Pepperstone
USD/MXN Buy Trade – Targeting 20.78338 Pair: USD/MXN 🇺🇸🇲🇽 Direction: Long 🔼 Target: 20.78338 🎯 Time Horizon: By Monday, Jan 20, 04:00 UTC ⏳ The pair has exhibited a downward movement, showing potential signs of a reversal. Current market behavior suggests a possible recovery toward the 20.78338 level, aligning with observed patterns in recent sessions. This trade is time-sensitive and expected to reach its conclusion by Monday at 04:00 UTC. External factors, such as market sentiment and USD-related developments, may influence the trajectory. Close observation is recommended for further confirmation of the anticipated price action. 🔍
Long
by GlobalHorns
USDMXN: The Mexican Peso Recovers After the PPIThe Mexican peso gained value against the dollar during the last session, accumulating a growth of nearly 1% . The event occurred shortly after the release of U.S. PPI data, which showed a moderate increase of 0.2%, compared to the expected 0.4%. This indicates that price levels have slowed down, potentially moderating the pace at which the Fed maintains high interest rates in the market. Uptrend: A consistent uptrend has been in place since May 2024, with no significant breaks that could invalidate the technical formation. However, recent bullish movements have failed to breach the 20.90 barrier, which has become the key level to watch for the upward pressure to continue. MACD: Lower highs in the MACD line oscillations, coupled with constant highs in price movements, have created a bearish divergence. This could indicate an imbalance in the speed at which the USD/MXN price has risen in the short term. Therefore, it’s crucial to consider the possibility of bearish corrections appearing in the near future. ADX: The ADX line has increased its oscillations in recent sessions but remains at the 20 level, indicating a lack of strength in short-term movements. This suggests that recent oscillations lack a clear directional trend and may reflect insufficient momentum in the current trend. Key Levels: 20.9033: A nearby resistance level corresponding to the November and December highs. Breaks above this level would mark a new peak and reinforce the buying strength of the uptrend. 20.0947: A critical support level that aligns with points on the upward trendline and the barrier marked by the 100-period simple moving average. Breaks below this level could strengthen new, consistent bearish pressure and pose a threat to the current uptrend. By Julian Pineda, CFA - Market Analyst
by FOREXcom
1
Mexican Peso Under Pressure Following Inflation DataThe Mexican peso is once again under pressure against the US dollar, following the release of Mexican inflation data that came in below market expectations. This depreciation, reflected in a 0.25% increase in the USD/MXN pair on Thursday, adds to a global and local context marked by uncertainty. The renewed strength of the dollar, driven by the resilience of the US economy –evidenced by data such as job openings and the non-manufacturing PMI– supports the narrative of a Federal Reserve (Fed) that is less inclined toward aggressive interest rate cuts. Adding to this is the ongoing uncertainty surrounding the policies of the incoming Trump administration, especially regarding inflationary matters, which collectively exert upward pressure on the USD. In contrast, the Mexican economy has recently shown unfavorable signs. Consumer confidence, released earlier this week, came in below expectations, reflecting growing caution among Mexican households. December inflation data, although close to the upper limit of the Bank of Mexico's (Banxico) target range of 2% to 4%, with an annual rate of 4.21%, represents a downside surprise. This data, in a context where Banxico now operates with fewer votes for its monetary policy decisions and under a governor previously inclined toward further normalization, opens the door to a more significant interest rate cut, possibly of 50 basis points, at the February meeting. Inflation in Mexico opens the door to a more aggressive rate cut, which could intensify pressure on the peso. This move, by eroding the rate differential between Mexico and the United States, at a time when less easing is expected from the Fed, could further increase upward pressure on the USD/MXN pair. Looking ahead, the upcoming inauguration of the Trump administration emerges as a crucial factor for the Mexican currency. Potential restrictive trade policies toward Mexico could generate volatility and exert greater pressure on the peso. Additionally, the release of the US non-farm payroll (NFP) data, with a forecast of 150,000 jobs added, adds another element of focus. A report indicating a tighter labor market than expected could further intensify negative pressure on the Mexican peso. The combination of a less accommodative Fed, uncertainty around Trump’s policies, and the possibility of a more aggressive rate cut by Banxico sets up a challenging scenario for the Mexican peso in the short term. We will closely monitor these factors and their impact on the Mexican currency.
by Pepperstone