USD/MXN - Sell the fact

USD/MXN fell sharply on Wednesday and remains under pressure in the Asian session today in what appears to be a ‘sell the fact’ trade. 

President Trump officially ordered construction of the Wall across the Mexico border, something he had promised repeatedly during the Presidential campaign.

Moreover, Trump’s anti-Mexico rhetoric pushed the Peso to record low of 22.0372 per dollar (Jan 11 high). Thus, markets had priced-in the bad news in advanced. 

Hence, the Peso shorts are finally being crowded out on confirmation of the fact - ‘Trump is indeed building a wall’. 

Reports hit the wires earlier today that Mexico’s Pena Nieto expressed regret and refused to pay for the wall. However, that has not had any major impact on the pair, leaving it largely unchanged on the day around 21.07 levels. 

USD/MXN Technical Levels

A break below 21.00 (zero figure) levels would expose 5-DMA support seen at 20.89. On the higher side, 5-DMA level of 21.31 could offer resistance, which, if breached could yield a re-test of 21.4611 (double top neckline).