USD/MXN Price Analysis: Juggles below 18.40 as investors await US PCE Inflation

• USD/MXN is oscillating in a narrow range below 18.40 ahead of US PCE Inflation.
• S&P500 futures have recovered their entire morning losses, portraying a rebound in the risk-appetite theme.
• USD/MXN is auctioning in a Descending Triangle that indicates a sheer contraction in volatility.

The USD/MXN pair is displaying a back-and-forth action in a narrow range of 18.36-18.38 in the Asian session. The asset has turned sideways as investors are awaiting the release of the Federal Reserve’s (Fed) preferred inflation tool. The United States Personal Consumption Expenditure (PCE) Price Index annual figure is seen higher at 4.3% vs. the former release of 4.4%. An occurrence in the same will dismantle the discussions of a pause in the policy tightening spell.

The US Dollar Index (DXY) is showing a subdued performance as investors have started ignoring the impact of more interest rate announcements by the Federal Reserve (Fed). Meanwhile, S&P500 futures have recovered their entire morning losses, portraying a rebound in the risk-appetite theme.

USD/MXN is auctioning in a Descending Triangle chart pattern on an hourly scale, which indicates a sheer contraction in volatility. The downward-sloping trendline of the chart pattern is plotted from February 9 high around 19.00 while the horizontal support is placed from February 17 low at 18.33.

The 100-period Exponential Moving Average (EMA) at 18.40 is acting as a major barricade for the Mexican Peso bulls.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which indicates an absence of a potential trigger.

Should the asset break above February 23 high at 18.46 confidently, US Dollar bulls will drive the asset toward February 17 high at 18.67 followed by February 15 high at 18.75.

Alternatively, a break below February 23 low at 18.29 will drag the asset toward 5 April 2018 low at 18.05. A slippage below the latter will further drag the asset toward 17 April 2018 low at 17.93.

USD/MXN hourly chart