USD/MXN slash losses as US NFP surpasses estimates, Mexican Peso holds steadily
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USD/MXN slash losses as US NFP surpasses estimates, Mexican Peso holds steadily

  • US jobs growth exceeds estimates, yet USD/MXN slips by 0.12%.
  • US Treasury bond yields’ increase lends some support to USD/MXN.
  • Bank of Mexico’s stand on record high-interest rates adds resilience to the Peso.

USD/MXN trims some of its losses but remains trading negatively, despite a solid US jobs report revealed before Wall Street opened, which did not stop the Mexican Peso from reaching new weekly lows. Traders’ mood improvement, seen as US equities post gains, cushioned the MXN from falling against its counterpart, the US Dollar (USD). At the time of writing, the USD/MXN is trading at 17.5308, down 0.10%.

MXN holds its ground amidst strong US jobs data and rising US Treasury bond yields

The USD/MXN dropped sharply from around 17.5000s toward the lows of the week of 17.4190 after the US Bureau of Labor Statistics (BLS) revealed Nonfarm Payrolls in May crushed analysts’ estimates of 190K, with the economy adding 339K jobs. Although the headline figure is impressive, digging a little deep, the Unemployment Rate jumped from 3.4% to 3.7%. Regarding wages, inflation, known as Average Hourly Earnings, rose 0.3% MoM but edged down from April 4.4% to 4.3%.

Later, the USD/MXN rallied, about to erase its earlier losses, as traders digested the US jobs report, underpinned by rising US Treasury bond yields. The 10-year benchmark note rate is 3.69%, ten basis points (bps) higher than Thursday’s close.

In the meantime, the US Dollar Index (DXY), a gauge of the buck’s value against a basket of six currencies, advances 0.47%, up above 104.000, set to finish the week with losses of 0.17%.

Across the border, Mexico’s Unemployment Rate for April was 2.8%, above estimates of 2.7%. Aside from this, the latest meeting minutes of the Bank of Mexico (Banxico) showed inflation and inflationary pressures cooling down after the bank held rates at 11.25%. On Wednesday, Banxico{s Governor Victoria Rodriguez Ceja said that the institution she commands would keep rates at record high for at least the two following meetings.

USD/MXN Price Analysis: Technical outlook

USD/MXN Daily chart

Given the fundamental backdrop, the USD/MXN remains downward biased, but recent price action could form a double bottom. Even though it’s just a double dip toward the 17.4000 area, it’s worth considering due to the latest downtrend, which started in November 2021, with the USD/MXN plunging 20%. If USD/MXN surpasses that support, the next stop would be the 17.0000 figure. Otherwise, if USD/MXN reclaims the 18.0000 figure, it will conform to the double bottom. Above this area, the USD/MXN’s next stop would be the 100-day EMA at 18.2563, followed by the April 5 daily high of 18.4010.

USD/MXN

Overview
Today last price 17.5335
Today Daily Change -0.0197
Today Daily Change % -0.11
Today daily open 17.5532
 
Trends
Daily SMA20 17.687
Daily SMA50 17.9287
Daily SMA100 18.2672
Daily SMA200 18.9978
 
Levels
Previous Daily High 17.7286
Previous Daily Low 17.5409
Previous Weekly High 17.9981
Previous Weekly Low 17.6165
Previous Monthly High 18.078
Previous Monthly Low 17.4203
Daily Fibonacci 38.2% 17.6126
Daily Fibonacci 61.8% 17.6569
Daily Pivot Point S1 17.4866
Daily Pivot Point S2 17.4199
Daily Pivot Point S3 17.2989
Daily Pivot Point R1 17.6742
Daily Pivot Point R2 17.7952
Daily Pivot Point R3 17.8619