USD/MXN Reaches Two-Day Highs as Dollar Index Soars
August 14, 20XX (City) – The USD/MXN pair has reached two-day highs today, Monday, August 14, at 17.13. This comes as the Dollar Index shoots up to 103.46, its highest level since July 6. Traders and investors will be closely monitoring market sentiment in the coming hours as risk aversion dominates the markets.
The Dollar’s surge is a result of the strong risk aversion sentiment in the markets, triggered by news of a new real estate crisis in China. The giant County Garden has become the protagonist in this crisis, fueling market uncertainty.
Tomorrow, the focus will shift to the US retail sales data for July. Analysts are expecting a rise of 0.4% month-on-month, compared to a 0.2% rise in June. This data will provide insights into the strength of the US economy and consumer spending.
Additionally, on Wednesday, all eyes will be on the release of the Federal Reserve’s minutes, which could offer clues about the central bank’s interest rate decision at its upcoming September meeting.
Currently, USD/MXN is trading above 17.07, gaining 0.40% daily. The first resistance level is at 17.14, the highest point recorded on August 10. If the momentum continues, the pair could reach 17.28, the ceiling on August 8. Further upward movement could push it to 17.42, the maximum level seen on August 3 and 4. If this level is broken, the psychological level of 18.00 could be targeted.
On the downside, the main support level is at the 7-year, 8-month low recorded on July 28 at 16.62. A break below this level could trigger a move towards 16.50 first and then to the region of 16.30/35, where the October 2015 lows are.
Overall, the performance of USD/MXN and the Dollar Index in the coming days will be greatly influenced by market sentiment, US retail sales data, and the Federal Reserve’s minutes. Traders and investors will be closely watching these developments for insights into the direction of the currency pair and the broader forex market.