The USD/MXN rate continues in the frames of a downtrend, but we can assume that the minimum was achieved a month ago. Now the rates consolidated in the range 17.654 - 17.989 MXN. Likely we have the formation of a new steady flat trend, where none of the currencies can get the stimulus to strengthen.
The Mexican peso is under the pressure of low oil prices and the worsening in trade relations with the United States. The US dollar is under pressure due to political instability and the scandals related with the administration of D. Trump, as well as the lack of support for his reforms.
This week, in addition to news related to the political crisis in the United States, the value of the dollar was also depending on the recently published Protocol of the FED meeting, which showed that opinions about further rate increases were divided due to the low inflation level and the current economic situation. Nevertheless, recent data about the economic situation in the United States, as well as data about the employment market was absent. From Mexico the market also hasn't had significant events, except new data about the volume of industrial output which fell in July by 0.3% after rising by 1% the previous month. Next week, we also won't have new economic statistics related with both countries. Except the political component, we'll have three factors which can influence the USD/MXN rates: the situation on the oil market, data about the business activity index in the USA, and the situation on the real estate market in the United States.
Thus, we can say for sure that volatility will remain low and the rates will continue in the frames of a flat trend. Points of entry can be fixed at the levels 17.654 and 17.989, the achievement of which will mean exit from the flat trend. At the moment the MACD oscillator is neutral. The Stochastic indicator shows that the rates are close to the oversold zone. So, in the near future, probably on Monday, we can expect a price correction and the possibility to open the deals to Buy.
