FxWirePro: USD/MXN attracts selling interest, could be on verge of a bigger drop

• USD/MXN dipped  on Wednesday  as peso gained traction after data showed Mexico inflation slowed   in June.

• Mexico’s inflation eased slightly less than expected in June, as the central bank assesses the pace of its ongoing rate-cutting cycle.

• Annual inflation in Mexico slowed to 4.32% in June, slightly above the 4.30% median forecast and down from May’s 4.42%. Banxico, the central bank, aims for a 3% inflation target with a one-point margin of tolerance.

• Mexico’s core inflation, which excludes food and fuel and is closely monitored by Banxico, rose to 4.24% in June from 4.06% in May, according to the national statistics agency.

•  Immediate resistance is located at 18.5951(38.2%fib), any close above will push the pair towards 18.708(50%fib ).

• Support is seen at 18.501 (Lower BB) and break below could take the pair towards 18.452(Lower BB).

Recommendation: Good to sell around 18.600 with stop loss of 18.900 and target price of 18.300