FxWirePro: USD/MXN recovers slightly, but downside risks remains

• USD/MXN recovered some ground  on Wednesday as dollar weakened after the Federal Reserve left interest rates unchanged.  
• The Federal Reserve kept interest rates unchanged on Wednesday and signaled rate cuts are still likely this year, though at a slower pace, as policymakers factored in higher inflation risks from the Trump administration’s new tariff plans..

• In their latest projections, Fed policymakers outlined a mildly stagflationary outlook for the U.S. economy, forecasting growth to slow to 1.4% in 2025, unemployment to rise to 4.5%, and inflation to end the year at 3%, notably above current levels.

• Earlier on Wednesday, initial jobless claims data showed a decline in new unemployment filings, though levels remained high enough to suggest continued weakening in the U.S. labor market through June..

• Separately, Data showed that Mexican private spending declined by 0.4% in Q1 compared to the previous quarter, signaling softer domestic demand.

•  Immediate resistance is located at 19.158 (38.2%fib), any close above will push the pair towards 19.278(June 3rdhigh).

• Support is seen at 18.844 (23.6%fib) and break below could take the pair towards 18.724(Lower BB).

Recommendation: Good to sell around 19.100 with stop loss of 19.350 and target price of 18.800