The Mexican Peso has seen a halt in its decline against the US Dollar after receiving positive economic data from the US, its largest trading partner. This has helped to boost sentiment towards emerging market currencies, including the MXN. The USD/MXN pair has paused and formed a Shooting Star candlestick pattern, indicating a possible reversal in the near future.
The support for the Mexican Peso comes from a combination of factors, including stronger-than-expected growth data from China and robust Retail Sales and Jobless Claims figures from the US. The Chinese data, which showed a 4.6% YoY increase in GDP in Q3, has lessened concerns about a global economic slowdown and provided a lift to market sentiment. Additionally, the strong US data has bolstered the outlook for the US economy, which is crucial for Mexican exports.
Despite the recent positive developments, there are still headwinds facing the Mexican Peso. These include threats of tariffs on Mexican car imports by former president Donald Trump, concerns about an economic slowdown in Mexico, political risks from constitutional reforms, and worries about the budget deficit. These factors could continue to weigh on the MXN in the coming days.
The USD/MXN pair saw a recovery on Thursday following the release of upbeat US data, including Retail Sales and Jobless Claims figures that exceeded expectations. This helped to alleviate fears of a potential recession and provided a boost to market sentiment. The positive data has also influenced expectations for the future path of US monetary policy, impacting currency movements.
Technical analysis of the USD/MXN pair suggests a possible correction in the near term after the formation of a Shooting Star candlestick pattern. However, the overall trend remains bullish, with the pair likely to continue its uptrend in the short term. The key level to watch is at 19.83, which could unlock further upside towards 20.10-20.15. The Relative Strength Index (RSI) indicates continued momentum to support a mildly bullish outlook for the pair.
Overall, the Mexican Peso has managed to recover ground against the US Dollar thanks to positive economic data from both China and the US. While there are still challenges ahead, including political and economic risks, the recent developments have provided some support for the MXN. Investors will be keeping a close eye on upcoming data releases and geopolitical events that could impact the currency going forward.
