FxWirePro: USD/MXN recovers from session lows, peso steady after Banxico's 0.50% rate cut

USD/MXN chart - Trading View 

Highlights:

    * Banxico cuts key interest rate by 50bps as expected

    * USD/MXN holds scope for further gains

The Central Bank of Mexico on Thursday cut key rate by 50bp as expected. It was the ninth consecutive rate cut and analysts expect further cuts to follow. 

The policy statement that followed reads on the dovish side, offered no major surprises, leaving the door open to further cuts.

“The outlook component of the statement remains relatively unchanged, which gives us confidence in maintaining our current policy rate forecast of two further 50bp cuts, followed by two 25bp cuts, that will bring the policy rate to 3.50% by end of year”, note TD Securities in a report.

The USD/MXN pair remained steady following the decision of the Bank of Mexico to cut the key interest rate. 

From a technical perspective, the bias continues to favor upside in the pair as price action holds support at 55-EMA.

Daily cloud is offering stiff resistance, but momentum remains bullish and volatility is rising. Scope for further gains.

Major Support - 22.20 (21W EMA); Major Resistance - 23.60 (Trendline)