USD/MXN Price Analysis: Mexican Peso searches for firm direction amid coronavirus fears
- USD/MXN stays modestly unchanged after declining from the record top.
- Mexico suspends large gatherings, seems to witness a lack of medical supplies.
- US COIVD-19 Bill favors the market’s risk reset while the virus fears continue.
- Mexican Retail Sales and the US Durable Goods Orders will decorate the economic calendar.
Having slipped from the record top the previous day, USD/MXN seesaws near 24.85 amid Wednesday’s Asian session. While the broad pullback in the US dollar weakness recently weighed on the pair, the coronavirus (COVID-19) pessimism in Mexico seems to question the sellers.
Fox News cites the increase in the virus cases while the Los Angeles Times mentioned the lack of masks in the nation that recently announced a ban on the large gatherings. “Officials counted 367 COVID-19 cases as of Tuesday afternoon, up from 316 the day before. There have been four deaths, including two people who had diabetes, Reuters reported,” said the Fox News.
On the other hand, the US policymakers are jostling over the much-awaited aid package, estimated at around $2 trillion, to combat the deadly disease. Even so, the world’s largest economy showed readiness to defer trade tariffs on the partners for 90-days while the New York City Mayor De Blasio reiterated the call to need the military in fighting the virus.
Risk-tone struggles to carry the previous day’s recovery even if the US 10-year treasury yields mark three basis points (bps) of gains to 0.85%.
Investors will now pay attention to Mexican Retail Sales for January as immediate catalyst ahead of the US Durable Goods Orders for the same month. It should also be noted that the coronavirus headlines will not lose importance in the meantime.
Technical Analysis
Buyers will wait for a sustained treading beyond 25.00 to question the latest high near 25.45 while the pair’s break below 24.50 could extend the pullback.