The Mexican Peso (MXN) is cautiously moving against the US Dollar (USD) as traders await another suite of high-impact US economic indicators, including Durable Goods Orders and Consumer Confidence data, due Tuesday.
After a slow start to the week from the US Memorial Day holiday, liquidity has returned to the markets, halting the bond swap-off, and a small recovery in the USD. However, the USD/MXN pair continues to trend lower, reflecting bearish sentiment.
Durable Goods Orders Expected to Contract Sharply
Markets are bracing for a sharp reversal in US manufacturing data:
- Durable Goods Orders (April) are expected to fall 7.9%, after a surprising 9.2% gain in March, indicating possible pressure from trade disruptions and weaker industrial demand.
- Consumer Confidence Index (May) is also in focus after plunging to 86.0 in April. Any improvement or further weakness could sway risk sentiment and impact USD pairs.
These data points are critical for assessing the strength of the US economy and will likely influence expectations for Federal Reserve interest rate decisions in the coming months.
Fed’s Kashkari Reiterates Hawkish Tone
In a speech at the Tokyo summit, Minneapolis Fed President Neel Kashkari emphasized a cautious approach to rate cuts, warning that large economic shocks—like tariffs and geopolitical tensions—require more time to analyze.
Kashkari reinforced the central bank’s data-dependent policy stance, signaling that the Fed will likely keep interest rates unchanged until there is more clarity on how recent shocks are affecting the economy.
Resistance Holds as Downtrend Persists
The USD/MXN is still hovering below its 10-day Simple Moving Average (SMA) of 19.33, with a trendline resistance since April currently stopping the price from going higher around 19.29 because it cannot seem to keep above these value areas.
The RSI is also depressing at 36.47, which indicates there is weak bullish momentum here but not into oversold levels.
The next immediate support level to watch is 19.20 and further down has the potential for further downside toward 19.11 (October low) and psychological 19.00.
To reverse the current bearish sentiment here, the pair must convincingly clear 19.47 resistance zone.
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