- Federal police strike against the government’s new security force plan in Mexico.
- Monthly consumer sentiment was also downbeat.
- Traders await US employment data for fresh impulse.
Dovish expectations from the US Federal Reserve and doubts over the US-China trade truce keep weighing on the USD/MXN pair even if police strikes and sluggish Consumer Confidence signal downside for the Mexican Peso (MXN). The quote takes the rounds to 19.0067 during early Friday.
Mexico’s Federal police seized control of their national command center in order to retaliate the President Andrés Manuel López Obrador’s new security force plan. Under the government’s plan, around 20,000 officers will form the National Guard team that will crack down on criminal gangs and the US-bound migrants. The Federal police officers cite less pay and benefits coupled with a tough compulsory entrance exam to be the main reasons behind the revolt.
Elsewhere, June month Consumer Confidence from Mexico lagged behind the market consensus. The seasonally adjusted figure fell short of 112.3 forecasts while flashing 107.5 mark whereas the headline figure remained under 109.9 expectations to 106.1.
Investors remain cautious ahead of the June month’s key employment numbers from the US. The headline Nonfarm Payrolls (NFP) might rise to 160K versus 75K while Average Hourly Earnings could rise .2% from 3.1% on a yearly basis. However, no change is expected in 3.6% Unemployment Rate.
Additionally, news/headlines concerning the trade developments between the US and China, together with monetary policy signals from the US Federal Reserve officials, if any, should be observed closely.
Technical Analysis
FXStreet Analyst, Matias Salord, spots the pair’s refrain from declining below 19.00 as a key reason to anticipate key time for sellers ahead:
Price is approaching an uptrend line from May lows that stands near 18.90 that is also a horizontal support. A test of 18.90 is expected if the pair continues to slide; a consolidation below 19.00 would be a signal that the test is coming. A firm break below 18.90 would expose 2010 lows at 18.75. If the pair moves closer to 18.90 and rebounds, it could anticipate more gains ahead. A rebound to 19.10 seems normal, and above, 19.20 and 19.30 are two critical resistances. A close on top of 19.20 (21-day SMA) would clear the way for a test of the 19.30 barrier that if broken should trigger a rally toward 19.50.
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