- You can see that we've really kind of done nothing during the trading session here on Wednesday as it looks like we will continue to see a lot of questions asked about where we are going next.
- The markets are trying to determine whether or not the tariffs in the United States are going to be applied to Mexico.
- At the same time, we had the Federal Reserve essentially do nothing during the day, although the statement was a little bit more hawkish.
We remain between the 20 Mexican peso level on the bottom and the 21 peso level on the top. Ultimately, the 50-day EMA sits underneath and does offer support. But I think really the way to look at this pair right now is that you're essentially right at fair value.
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I’d Be Buying Pullbacks at this Point
Pullbacks continue to offer buying opportunities, and if we get some type of bouts, then I think that makes a certain amount of sense. But really at this point in time, I anticipate that we probably don't go anywhere for a minute. If we can break above the 21 level though, that could open up a much bigger move. If we were to break down below the 20 level, then that sets up a potentially interesting setup.
At that point, we would have to see how the US dollar is performing around the world, but right now, it's starting to look more likely that the Fed may not cut at all this year. And if that's the case, that will keep the dollar stronger for some time. However, the Mexican economy is a major exporter to the United States, so that might lead to just an elevated dollar in a grind sideways for months. We'll just have to wait and see.
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