Banxico delivers price reduce as anticipated; USDMXN rebound checks key resistance

The Bank of Mexico (Banxico) delivered a widely expected 50 basis point rate cut, bringing the benchmark rate down to 9.00% in a unanimous decision. The central bank signaled that the inflation outlook supports continued easing, and it anticipates future cuts of similar size if conditions permit. However, policymakers also noted that recent shifts in U.S. monetary policy have introduced added uncertainty, which could influence the pace and magnitude of future adjustments.

Going into the cut, the USDMXN pair has seen a firm rebound off the recent lows, but upside momentum has now run into a wall of resistance.

Looking back, last week – and again earlier this week – sellers had their chance to break the pair lower, pushing below the key swing area between 20.0156 and 20.1564. However, the bearish follow-through failed. Sellers had their shot, and they missed. The buyers reentered.

Now, the cut has happened, and so has the rally, and the traders in the USDMXN are now facing its next hurdle. Price is currently testing a dual technical ceiling defined by the :

The high price today reached to the 100 day MA, and stalled.

Going forward, if the buyers are to take more control, a decisive break above this zone would shift the bias further in favor of buyers and open the door to higher retracement levels such as the 38.2% and 50.0% Fibonacci levels of the February–March decline.

Until that breakout occurs, the market remains in neutral-to-positive territory, with buyers trying to hold the gains after last week’s break lower failed. Close support is the 100 bar MA on the 4-hour chart at 20.1564..