The 50 basis point rate hike by the Bank of Mexico was as expected especially after the Mexican President inadvertently leaked it this morning.
Nevertheless, the USDMXN is trading to new lows for the day. So at least the market saved a little reaction it seems.
Looking at the daily chart, the USDMXN is, moving below the recent swing lows going back to October 26 at 20.161. The move to the downside today also took out the swing lows from February at 20.1545, and the swing low from yesterday which tested that February low level (the low reached just below that level) at 20.1529 (see red numbered circles in the chart below). The 20.1545 level will now be close resistance for traders looking for more downside. Stay below and the bears remain in full control
Drilling down into the hourly chart, the MXN has been trending to the downside since breaking below its 100 hour moving average back on March 9, the pair traded up and down below the 100 hour moving average until March 15 when the price started to accelerate more to the downside.
The USDMXN price has not traded above its 100 hour moving average since the break on March 9. The current 100 hour moving average comes in at 20.2882.
Should the price get back above the 20.1545 in the short term, traders will look toward that 100 hour moving averages the next key barometer. Stay below keeps appears still more in play. Move above and there will be a shift in the short term trading bias.
