The surprise 50 BP cut has limited impact
The Mexico central bank announced a surprise 50 basis point cut to 6%. The cut was unanimous. The central bank says that GDP could contract by 5% in the 1st half of 2020. The decision was off of a meeting date.
The USDMXN initially move higher on the announcement to a high at 24.4249, but has since rotated back down and currently trades at 24.3535. The 100 bar moving average on the 5 minutes chart currently comes in at 24.3480. The prices been above and below that moving average line over the last few hours but the momentum is not been able to get going. The 38.2% retracement of the days trading range currently comes in at 24.29123. A move below that level would tilt some of the intraday bias back to the downside (if the price can stay below). Absent that, and the buyers/bulls still get the nod for control on the short-term chart.
Taking a broader look at the 4 hour chart below, the price today did move above a topside trend line at 24.2231 currently. For the week, there have been looks below the 100 bar moving average on the 4 hour chart (currently at 24.0434) but downside momentum could not be established.
On the topside, the break of a swing area at 24.5530 to 24.6440 (see green numbered circles) would give the bulls/buyers more upside confidence. The pair has been above that area going back to the end of March, but buyers could not keep the price above the area.
