The Dollar Soars to Three-Week Highs Against the Mexican Peso Ahead of U.S. GDP and Mexico Unemployment Data

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The USD/MXN is experiencing a strong rise this Wednesday, surging from the European midday low of 16.74 to a new 20-day high of 16.93 just before the American market opens.

The Dollar Index (DXY) has been recovering since yesterday, Tuesday, when the Conference Board’s consumer confidence index exceeded expectations.

Additionally, the risk aversion sentiment dominating the markets is also boosting the greenback. The Dollar Index has risen today to 104.87 points, its highest level since Friday, May 24.

Another driver for the Dollar this week is the comments from Fed members, as they have hinted that there is still some way to go in moderating inflation before the first interest rate cut can occur.

Tomorrow, the focus will shift to Mexico’s April unemployment data, which is expected to rise to 2.6% from 2.3% in March. In the U.S., the day’s key data will be the preliminary annualized GDP for the first quarter, which is estimated to be revised down to 1.3% from the initial estimate of 1.6%.

Technical Analysis of USD/MXN

With the Dollar trading against the Mexican Peso around 16.92, gaining a significant 0.79% on the day, the next upward resistance awaits at the psychological zone of 17.00. Engaged in an ascending channel on the one-hour chart, a further advance will lead the pair towards 17.39, the peak of April 25, before attempting a move to the 18.00 region.

On the downside, a break of the four-day low marked yesterday at 16.63 will take the USD/MXN towards the support zone of 16.52, the lows of May 21. Below that, 16.26 awaits, the low of 2024 recorded on April 9.