• USD/MXN rose towards level 20.500 on Monday as traders continued to digest the likelihood that the Federal Reserve will make fewer rate cuts next year.
• The U.S. dollar has strengthened in recent weeks, driven by expectations of a less dovish Federal Reserve as inflation stays above the central bank's 2% annual target.
• Fed policymakers this month revised their 2025 interest-rate forecast, reducing expected cuts to 50 basis points from the previously projected 100 basis points.
• At GMT 16:10, the pair was trading up 0.93% at 20.500, highest since 2nd December .
• Immediate resistance is located at 20.547 (Higher BB), any close above will push the pair towards 20.627(23.6%fib).
• Support is seen at 20.457 (38.2%fib) and break below could take the pair towards 20.342(50%fib).
Recommendation: Good to buy around 20.480, with stop loss of 20.300 and target price of 20.700
