Forex News
- GBP/JPY recovers 200-day SMA after sliding to 211.47.
- Upside remains capped by 100- and 50-day SMA resistance.
- Break below 211.91 exposes 211.00 and 209.58 support.
The British Pound retreats against the Japanese Yen, down about 0.24%, as the Yen is poised to end the week on a higher note. However, GBP/JPY is poised to finish the week with minimal gains, trading at 212.64.
GBP/JPY Price Forecast: Technical outlook
The GBP/JPY trades sideways, though slightly tilted to the downside, following an intervention in the FX markets by US and Japanese authorities. Worth noting that after soft US jobs data, Japanese Finance Minister Katayama said she agreed with US Treasury Secretary Scott Bessent that FX markets had been affected by moves rather than fundamentals.
This pushed GBP/JPY to the day's low of 211.47, slightly below the 200-day SMA of 211.91, but buyers reclaimed the latter and surpassed 212.00. After the rebound, the cross is about to end Friday’s session near the highs, but it will face key resistance at the 100-day SMA at 214.48, followed by the 50-day SMA at 215.42.
In the event of further losses, the first GBP/JPY support is 212.00. Below the next support is the 200-day SMA at 211.91, followed by 211.00. Beneath emerges the August 3 low of 209.58.
GBP/JPY Price Chart – Daily
Japanese Yen Price This week
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies this week. Japanese Yen was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.11% | -0.02% | 0.25% | -0.50% | -0.42% | 0.10% | 0.13% | |
| EUR | 0.11% | 0.08% | 0.38% | -0.38% | -0.18% | 0.20% | 0.25% | |
| GBP | 0.02% | -0.08% | -0.09% | -0.48% | -0.31% | 0.11% | 0.14% | |
| JPY | -0.25% | -0.38% | 0.09% | -0.68% | -0.52% | -0.06% | -0.04% | |
| CAD | 0.50% | 0.38% | 0.48% | 0.68% | 0.17% | 0.64% | 0.62% | |
| AUD | 0.42% | 0.18% | 0.31% | 0.52% | -0.17% | 0.40% | 0.44% | |
| NZD | -0.10% | -0.20% | -0.11% | 0.06% | -0.64% | -0.40% | 0.04% | |
| CHF | -0.13% | -0.25% | -0.14% | 0.04% | -0.62% | -0.44% | -0.04% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
Standard Chartered’s Jonathan Koh and Edward Lee now expect Bangko Sentral ng Pilipinas (BSP) to keep its policy rate unchanged at the 27 August meeting, abandoning a previously projected hike. The bank trims its 2026 Gross Domestic Product (GDP) growth forecast to 3.5% and lowers Consumer Price Index (CPI) expectations, while still projecting rate cuts in 2027 once inflation falls below 4%. BSP rhetoric is expected to stay hawkish.
BSP seen on hold but still hawkish
"We now expect Bangko Sentral ng Pilipinas (BSP) to keep its policy rate unchanged at its 27 August meeting, versus our previous forecast of a 25bps hike."
"We maintain our view of 25bps of rate cuts in Q2-2027 and Q3-2027 once inflation moderates to below 4% in Q2-2027."
"Consequently, we lower our end-2026 and end-2027 policy rate forecasts to 4.75% (5% prior) and 4.25% (4.5% prior), respectively."
"We lower our 2026 GDP growth forecast to 3.5% (4.0% prior) on softer-than-expected growth in H1."
"We also revise down our 2026 CPI inflation forecast to 5.9% (6.5% prior) on lower-than-expected inflation to date."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The US Dollar Index (DXY) fell below the 100.00 region after sinking through Friday's session. July Nonfarm Payrolls (NFP) showed the US economy shedding 23K jobs against forecasts of an 80K gain, with June revised down to 20K, and Average Hourly Earnings slowing to 3.2% on the year. Markets that had spent late July pricing a hawkish Federal Reserve (Fed) reversed course in the morning. This coming Wednesday's Consumer Price Index (CPI), projected at 3.4% YoY headline and 2.5% YoY on the core measure, now decides whether that repricing extends or stalls. Two Fed speakers follow on Thursday, with Hammack and Barkin both scheduled.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.35% | -0.33% | -0.58% | -0.56% | -0.51% | -0.46% | -0.60% | |
| EUR | 0.35% | 0.03% | -0.22% | -0.19% | -0.16% | -0.11% | -0.24% | |
| GBP | 0.33% | -0.03% | -0.23% | -0.22% | -0.19% | -0.13% | -0.27% | |
| JPY | 0.58% | 0.22% | 0.23% | 0.03% | 0.07% | 0.12% | -0.04% | |
| CAD | 0.56% | 0.19% | 0.22% | -0.03% | 0.04% | 0.10% | -0.06% | |
| AUD | 0.51% | 0.16% | 0.19% | -0.07% | -0.04% | 0.07% | -0.09% | |
| NZD | 0.46% | 0.11% | 0.13% | -0.12% | -0.10% | -0.07% | -0.15% | |
| CHF | 0.60% | 0.24% | 0.27% | 0.04% | 0.06% | 0.09% | 0.15% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
The second full week of August will test whether the US Dollar sell-off that followed July's payrolls collapse has further to run as investors turn from the labor market to prices. The spotlight falls on Wednesday's CPI report, with Producer Price Index (PPI), Retail Sales and the preliminary Michigan Consumer Sentiment survey filling out the week.
On the other side of the pond, the Reserve Bank of Australia (RBA) meets on Tuesday, and the United Kingdom (UK) publishes second-quarter Gross Domestic Product (GDP) on Thursday. China opens proceedings on Sunday with inflation figures that will shape the tone for commodity-linked currencies.
The EUR/USD pair ends the week above the 1.1550 region, near two-month peaks. The Eurozone calendar is heavy on confirmations rather than surprises: German and Italian final inflation figures land on Wednesday, followed by Spanish and French readings later in the week, while Thursday brings Eurozone Industrial Production. The main event is Friday's preliminary second-quarter GDP, expected at 0.4% on the quarter and 1% on the year, alongside the first read on Employment Change. With the European Central Bank (ECB) content to wait, the pair remains a Dollar story.
GBP/USD is trading near 1.3500 as it closes the week, testing the resistance level for the second time this month. The UK finally has something of its own to trade on. Thursday delivers second-quarter GDP, forecast to slow to 0.4% from 0.6%, with monthly GDP seen contracting 0.1% and Manufacturing Production expected to fall. A soft set of numbers would complicate the Bank of England's position and give Cable its first domestic drag in weeks.
USD/JPY ends the week beneath the 158.00 barrier after the Yen jumped on the US NFP miss, with traders still alert to intervention a week on from the joint Tokyo-Washington operation. Japan's calendar is thin with June Current Account figures on Sunday the only notable release. That leaves the pair hostage to US data and to the question of whether authorities return.
AUD/USD trades below the 0.7100 level, its best in two months as the Aussie has gained strength. The RBA will announce its interest rate decision on Tuesday and is universally expected to hold at 4.35%, shifting attention to the accompanying statement and Governor Bullock's speech on Thursday. Chinese CPI and PPI on Sunday matter as much: consumer prices are seen slowing to 0.8% annually and factory-gate inflation to 3.8%, and softer readings would revive the growth concerns that have capped the Aussie all year.
Gold ends the week above $4,300 after its strongest run since January. The metal has been carried by collapsing rate-hike expectations, which makes Wednesday's CPI the single most important release on its calendar. A soft print would confirm the move. A firm one would force a reassessment, particularly with Strait of Hormuz risk keeping energy prices unsettled and the inflation question unresolved.
- US Treasury yields fall as Hormuz progress pressures Oil prices.
- Weak NFP report pushes traders to trim Fed hike bets.
- Ten-year yield drops as markets price lower inflation risks.
US Treasury yields drop across the curve on Friday amid growing speculation that the Iran-Oman deal is about to be sealed, which has so far pushed energy prices lower, while investors also digest a weak Nonfarm Payrolls report in the US.
Yields slide across the curve as Oil declines, payrolls disappoint and traders price out September Fed tightening
Recently, a US official said that there has been progress between Oman and Iran on Hormuz, and that once a deal is announced to restore shipping without impediments, the US Navy will lift the blockade of Iranian ports.
West Texas Intermediate (WTI), the US crude benchmark, extended its losses of nearly 1%, down to $77.50.
Meanwhile, money markets are indicating a lower likelihood that the Federal Reserve (Fed) will hike rates in September. The probability has decreased to 30% from 58% yesterday, with a 70% chance that the Fed will keep rates steady, based on Prime Terminal data.
The US 10-year Treasury note is yielding 4.651%, down nearly three basis points, a signal that market participants have begun to price out a quick resolution to the US conflict, which could reduce the need for a rate hike by the Fed.
In July, US Nonfarm Payrolls declined by 23K jobs, falling short of the expected 80K increase. Revisions for May and June reduced the total by 103K jobs, lowering previous estimates. While this data backs the Fed’s decision to pause rate hikes, the Unemployment Rate decreased slightly from 4.2% to 4.1%.
The Greenback tumbled on the report, as the US Dollar Index (DXY), which measures the US Dollar's strength against six other currencies, fell 0.42% to 99.54.
Next week, investors are eyeing the release of US inflation on the consumer and producer sides, followed by jobless claims data and the University of Michigan (UoM) Consumer Sentiment.
US 10-year Treasury yield chart
Interest rates FAQs
Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation.
Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money.
Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold.
The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.
Commerzbank’s FX analysts, including Charlie Lay and Moses Lim, note that USD/IDR slipped slightly but stayed below the key 18,000 level as softer global Oil prices and stronger Indonesia Q2 GDP supported the Rupiah. They highlight that clearer Bank Indonesia leadership and confidence in BI’s independence should aid IDR over the coming weeks, though several structural and geopolitical risks may limit further appreciation.
Rupiah supported but upside constrained
"Q2 GDP rose more than expected by 5.3% yoy (Bloomberg consensus: 5.1%) vs 5.6% in Q1. Growth was supported by resilient domestic demand, particularly stronger investment activity, while household consumption and government spending remained firm. In H1, the economy expanded 5.5%, slightly below the government's full-year target range of 5.6-6.0%."
"On inflation, July CPI surprised to the downside, rising 2.9% yoy (Bloomberg consensus: 3.2%) vs 3.3% in June. This was the softest reading in three months and moved closer to the midpoint of BI's 1.5-3.5% target range."
"Separately, local media reported that President Prabowo is preparing to submit a shortlist of candidates to replace Perry Warjiyo as BI Governor. Acting Governor Destry Damayanti is widely viewed as the frontrunner. She is also regarded by markets as the candidate most likely to preserve policy continuity. Parliament is expected to review the nominations after returning from recess on 14 August. The approval process is expected to take one to two weeks."
"In FX, USD/IDR dipped 0.1% to 17,918 yesterday but remained below the key 18,000 psychological level. The pair closed at its lowest level since 23 July, supported by softer global crude oil prices and improved sentiment following the strong Q2 GDP print."
"Greater clarity regarding the next BI Governor appointment, alongside restored confidence in the BI's independence, should support IDR in the coming weeks. However, gains may be capped by several headwinds, including the risk of an MSCI downgrade to frontier market status, concerns that the fiscal deficit could breach the statutory 3% of GDP ceiling, and ongoing geopolitical uncertainty."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- XAG/USD jumps nearly 3%, reclaiming 50-day SMA and $63.00.
- RSI crosses above neutral, strengthening the near-term bullish bias.
- Break above $65.00 exposes $68.98 and $70.00 next.
Silver price surges nearly 3% as it clears the 50-day Simple Moving Average (SMA) at $62.13, and reclaims the $63.00 figure as it struggles to surpass key resistance seen at $63.28, the July 6 high.
XAG/USD Price Forecast: Technical outlook
Silver trades sideways, but bulls are gaining traction, as indicated by the Relative Strength Index (RSI). The RSI crossed above its 50-neutral level, poised to hit the overbought 70 level, rather sooner than later.
This suggests that the white metal could test higher prices, once it crosses the $65.00 mark. A breach of the latter will expose the 100-day SMA at $68.98, before testing the psychological $70.00 mark. Once cleared, the 200-day SMA becomes the next ceiling level at $71.22.
If XAG/USD retreats below the $63.00, a retracement towards the 50-day SMA is on the cards. On further weakness, Silver could fall towards the $60.00 mark, followed by the August 3 low of $56.57.
XAG/USD Price Chart – Daily
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
- The cross plunged near the start of the American session despite broad Euro gains elsewhere.
- The Yen jumped after the US payrolls shock, with traders alert to intervention a week on from the joint Tokyo-Washington operation.
- German industrial and trade figures offered the Euro little help, and the ECB is in no hurry.
EUR/JPY trades on the back foot on Friday, easing away even as the Euro (EUR) posts solid gains against the US Dollar (USD). The Japanese currency surged suddenly near the start of the American session after a surprisingly weak United States (US) employment report. But the cross recovered much of those losses fairly quickly.
Japan and the United States conducted coordinated Yen-buying intervention last Friday, a rare bilateral action, and that memory is enough to make traders reluctant to sell the Yen into a US Dollar that fell over 1% against the Yen during the early American session on Friday. The Yen now drifts well away from the 40-year low it reached in July.
The European Central Bank (ECB) continues to adopt a cautious stance after leaving interest rates unchanged at its latest meeting. Markets currently expect only one additional rate hike before the end of the year, with a lower chance of a second increase.
Iran's parliament speaker and top negotiator, Mohammad Bagher Ghalibaf, accused US President Donald Trump of staging "theater diplomacy" on Thursday, and under the draft plan reported by Fars, US and Israeli ships would be barred from the Strait of Hormuz. Flows through the waterway are unlikely to return to pre-war levels any time soon even if Iran and Oman finalize their framework. For an economy that imports almost all of its energy through that route, higher and less certain Crude prices erode Japan's terms of trade, which is the mechanism that drove the Yen to four-decade lows in the first place.
Short-term technical analysis:
On the 4-hour chart, EUR/JPY trades at 182.00, retaining a mildly bearish near-term bias as it holds below both the 20-period Simple Moving Average (SMA) at 182.17 and the 100-period SMA at 184.70. The pair is caught under a nearby horizontal cap at 182.13, while the Relative Strength Index (RSI) around 41 suggests subdued momentum rather than aggressive selling, hinting at a consolidative tone beneath these overhead levels.
On the topside, immediate resistance is seen at 182.13, followed by the 20-period SMA at 182.17. Asustained break above this cluster would open the way toward the next barrier at 182.69 before the broader 100-period SMA near 184.70.
On the downside, initial support aligns at 181.76, ahead of a lower horizontal floor at 181.30 where the cross found support early in the American session on Friday. A decisive breach there would reinforce the bearish bias and expose deeper retracement levels in the coming sessions.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- GBP/USD holds sideways, but upside bias survives above 1.3406.
- Break above 1.3558 opens the path toward 1.3600.
- Failure below 1.3500 risks a pullback toward key SMA support.
The Pound Sterling (GBP) edges higher by some 0.29% against the US Dollar (USD) on Friday, yet it remains trading sideways, unable to decisively crack 1.3500 after reaching a three-week peak of 1.3509, and has retreated to the 1.3490 area.
GBP/USD Price Forecast: Technical outlook
The technical picture shows that GBP/USD is consolidating, yet it is slightly tilted to the upside after clearing the 200-day Simple Moving Average (SMA) at 1.3406. Market structure suggests the uptrend might resume once buyers reclaim the July 15 swing high at 1.3558, opening the door to a test of 1.3600.
In that scenario, the next area of interest for GBP/USD would be the May 11 swing high at 1.3653, followed by 1.3700.
On the flip side, if GBP/USD remains below 1.3500, look for a pullback towards August’s 3 low of the day at 1.3417. A breach of the latter will expose the convergence of the 100- and 200-day SMAs at 1.3406/05, followed by the 50-day SMA at 1.3365.
GBP/USD Price Chart – Daily
Pound Sterling Price This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.12% | -0.01% | 0.24% | -0.54% | -0.38% | 0.13% | 0.13% | |
| EUR | 0.12% | 0.11% | 0.38% | -0.41% | -0.15% | 0.28% | 0.26% | |
| GBP | 0.01% | -0.11% | -0.06% | -0.53% | -0.27% | 0.14% | 0.14% | |
| JPY | -0.24% | -0.38% | 0.06% | -0.72% | -0.48% | -0.01% | -0.02% | |
| CAD | 0.54% | 0.41% | 0.53% | 0.72% | 0.25% | 0.72% | 0.68% | |
| AUD | 0.38% | 0.15% | 0.27% | 0.48% | -0.25% | 0.40% | 0.40% | |
| NZD | -0.13% | -0.28% | -0.14% | 0.00% | -0.72% | -0.40% | 0.00% | |
| CHF | -0.13% | -0.26% | -0.14% | 0.02% | -0.68% | -0.40% | -0.00% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note USD/SGD has firmed modestly, with the pair closing at 1.2835 after testing both 1.2800 and 1.2840. Short-term momentum now favors a mild upside, though strong resistance at 1.2850 is expected to cap gains. On a 1–3 week horizon, they still see downside risk, but stress that a clear break below 1.2790 is needed to signal further weakness.
Mild upside while downside risk lingers
"24-HOUR VIEW: Following Wednesday’s price action, we noted yesterday that “the underlying tone has softened somewhat.” We indicated that USD “could edge lower,” but we pointed out that “given the lackluster downward momentum, any decline is unlikely to reach 1.2790.” The subsequent price movements did not unfold as expected. USD dipped to 1.2800 and then rose to 1.2840 before closing 0.16% higher at 1.2835. Upward momentum has increased, albeit not significantly. Today, USD could edge higher but based on the current momentum, any advance is unlikely to break the strong resistance at 1.2850. On the downside, a break below 1.2820 would indicate that current upward pressure has eased."
"1-3 WEEKS VIEW: We have held the same view since Monday (03 Aug, spot at 1.2815), when we highlighted that while the recent strong momentum “suggests further downside risk, USD must break and hold below the significant support at 1.2790 before further declines are likely.” Although USD subsequently tested 1.2790, it has not been able to make further headway on the downside. We will maintain our view as long as 1.2850 (no change in ‘strong resistance’ level) is not breached, but the likelihood of USD breaking clearly below 1.2790 has diminished."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Mexican Peso rallies as weak NFP crushes Fed hike expectations.
- Mexican inflation falls to six-year low after Banxico hold.
- USD/MXN rebounds from a low of 17.09 but remains under bearish pressure.
The Mexican Peso (MXN) capitalizes on a weaker US jobs report and soars versus the US Dollar (USD) on Friday as risk appetite improves and the Greenback gets battered on speculation that the Federal Reserve (Fed) might not raise rates in 2026. At the time of writing, the USD/MXN pair trades at 17.18 after refreshing five-month lows at 17.09.
USD/MXN tumbles as Mexico’s inflation approaches target
The Mexican economic docket showed that inflation eased to a six-year low, from 3.37% to 3.12% YoY in July, according to INEGI, the National Statistics Agency. Core inflation, which strips volatile items, was 3.95% YoY, slightly exceeding forecasts of 3.94%. The report came a day after the Bank of Mexico (Banxico) left rates unchanged at 6.50%, while hinting that the main reference rate would remain steady for the foreseeable future.
Should inflation continue its downward trajectory, it could end 2026 below Banxico’s 3.5% forecast for headline and underlying inflation in 2026. The central bank projects that inflation will converge to its 3% goal in the last quarter of 2027.
Earlier, US Nonfarm Payrolls for July showed a 23K job loss, missing the forecast of an 80K gain. May and June revisions cut 103,000 jobs, lower than before. The data support the Fed’s pause on rate hikes, but the Unemployment Rate fell from 4.2% to 4.1%.
The report weakened the Greenback. The US Dollar Index (DXY), which measures the US Dollar's strength against six other currencies, has fallen by 0.42% to 99.54.
Next week, the Mexican economic calendar will feature June Industrial Output. Across the southern border, investors are eyeing the release of inflation on the consumer and producer side, followed by jobless claims data and the University of Michigan (UoM) Consumer Sentiment.
USD/MXN Price Forecast: Technical outlook
In the daily chart, USD/MXN trades at 17.1364, extending its retreat and holding below the clustered simple moving averages (SMA) trio now aligned near 17.4061, which reinforces a bearish near-term bias. The pair has also slipped back under the more recent downward resistance trend line, whose break point at 17.4584 acts as an additional topside cap, while the Relative Strength Index (14) at 32.4 hovers just above oversold territory, hinting that selling pressure is stretched but not yet exhausted.
On the topside, initial resistance is seen at the Triple SMA around 17.4061, followed by the downward-sloping trendline reference at 17.4584, where further rallies would likely stall unless momentum improves decisively. On the downside, the current area around 17.1364 is the immediate battleground, with a deeper slide opening the way toward the earlier structural break zone near 15.6962, while the RSI’s proximity to oversold levels suggests that any move lower could eventually invite a corrective bounce rather than a sustained reversal for now.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Mexican Peso FAQs
The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.
The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.
Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.
As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
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