The USD/MXN ranks among the most intriguing major currency pairs for traders to wager on because of its rather contradictory results for nearly a year.

As of this writing the USD/MXN currency pair is near the 20.25000 vicinity after having demonstrated a solid day of selling last Friday before going into the weekend. Yesterday’s trading provided what can be term as a consolidated range near important support ratios which were last tested in late July.  The last time the USD/MXN traded below the 20.20000 with sustained results was in the month of June.

While short term traders may not want to think about results from June, when the USD/MXN was trading near lows of almost 19.85000 on the 24^th of June and even lower earlier in the month it could prove important. These prices are noted because it shows just how strong the Mexican Peso has been compared to many of the other major currencies against the USD. While the USD has powered to new highs against the likes of the EUR, JPY, GBP and others over the long term, the USD/MXN has actually produced a rather strong proving ground for sellers frequently.

Inflation Concerns will Spark the USD/MXN today via Consumer Price Data

The reason the USD/MXN currency pair has remained a rather bearish wager is because of energy prices. International demand for Crude Oil helps keep the Mexican Peso strong because Mexico is a large exporter of energy. Support levels near the 20.20000 level should be monitored closely today and will be affected by behavioral sentiment from financial houses because of U.S inflation data.

• If the U.S CPI data comes in stronger than expected today, this could spur on short term buying momentum in the USD/MXN.
• Traders should be prepared for rapid fire trading later today and have risk management in order; spikes should be expected depending on the outcome of the U.S inflation numbers.

Fast Conditions and Whipsaw Results will likely be Demonstrated Momentarily Today

Speculators who enjoy dynamic wagering and have steel stomachs may want to pursue the USD/MXN today.  Lightning quick results will likely be produced upon the publication of the Consumer Price Index numbers, if the results are stronger than expected the USD/MXN could see a bounce higher from current support levels. Traders certainly need to be ready for what are almost guaranteed to become rather fast conditions.

If the inflation data comes in higher than expected it could ignite buying of the USD/MXN for a while until a ‘new’ equilibrium is found. However, if the inflation numbers meet expectations, this could actually spur on additional selling of the USD/MXN which could test support levels near the 20.16000 to the 20.10000 vicinity with sudden bursts of power. Technical traders will have their short term skill sets tested today and risk management will be essential.

USD/MXN Short-Term Outlook

Current Resistance: 20.30900

Current Support: 20.20150

High Target: 20.49800

Low Target: 20.15300

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The pair will likely continue rising as buyers target the second resistance level at 1.2415.

Bullish View

• Buy the GBP/USD pair and set a take-profit at 1.2420.
• Add a stop-loss at 1.2200.
• Timeline: 1-2 days.

Bearish View

• Set a sell-stop at 1.2225 and a take-price at 1.2150.
• Add a stop-loss at 1.2320.

The GBP/USD price continued its bullish trend as investors refocused on the upcoming interest rate decision by the Bank of England (BoE). It also rallied as the US dollar and bond yields continued falling. The pair rose to a high of 1.2295, which was the highest level since June 28th of this year. It has risen by more than 4.22% from the lowest point this year.

US Dollar Sell-Off

The GBP/USD pair continued its bullish trend as the US dollar continued falling. The dollar index has droopped from last week’s high of $109.30 to the current $105.7. This decline is mostly because of the ongoing feeling that the Federal Reserve will not be as hawkish as expected.

Last week, the Fed decided to hike interest rates by 0.75%, bringing the year-to-date increase to 225 basis points. The bank will also continue reducing its balance sheet. At the same time, the committee warned that it will continue hiking interest rates in a bid to fight the soaring inflation.

However, analysts now believe that the Fed will not be as hawkish as expected because of the performance of the economy. Data published last week revealed that new and existing home sales declined sharply in June.

Worse, additional data showed that the country sank to a recession in the second quarter as it contracted by 0.9%. As a result, the yield of the 10-year bond year government bonds dropped to 2.66% while the 30-year fell to 2.90%.

The next key catalyst for the GBP/USD pair will be the upcoming American JOLTs data. Economists expect the data to show that the number of vacancies dropped from 11.25 million in June to 11 million in July.

On the bigger picture, the next key catalyst to watch will be the upcoming Bank of England interest rate decision and the US jobs data.

GBP/USD Forecast

The four-hour chart shows that the GBP/USD pair formed an inverted head and shoulders pattern in July. In price action analysis, this pattern is usually a bullish sign. The pair has managed to move above the 25-day and 50-day moving averages. As the pair rose, it moved to the first resistance of the standard pivot point.

Therefore, the pair will likely continue rising as buyers target the second resistance level at 1.2415. A drop below the support level at 1.2200 will invalidate the bullish view.

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The coin will likely retest the $116 level and then resume the bearish trend as bears aim for the support at $107.

Bearish View

• Set a sell limit at 116 and add a take-profit at 107.
• Add a stop-loss at 130.
• Timeline: 1 day.

Bullish View

• Set a buy-stop at 112 and a take-profit at 135.
• Add a stop-loss at 100.

The Litecoin price has erased most of the gains it made in March as investors reflect on the hawkish Federal Reserve. The LTC/USD pair is trading at 112, which is about 16% below its highest level in March this year. It is hovering near its lowest level since March 21st.

Cryptocurrency Prices Retreat

The performance of LTC has mirrored that of other cryptocurrencies and assets as investors focus on the inverting yield curve. Bitcoin has fallen from last month’s high of $48,000 to less than $44,000. At the same time, the total market cap of all digital currencies has moved back below the $2 trillion level.

Other assets have also pulled back. For example, the Dow Jones, Nasdaq 100, and S&P 500 indices have dropped in the past few consecutive days. While commodity prices are still at elevated levels, most of them are significantly below their highest points in March.

The Litecoin price is falling after the Fed published minutes of the past meeting. The minutes showed that the committee was embracing a more hawkish tone in a bid to slow the soaring inflation. This tone will include rising interest rates in all the remaining meetings of this year. It will also involve quantitative tightening (QT) policies that will see it reduce the size of its balance sheet by $95 billion.

Historically, a hawkish Fed tend to be difficult for high-risk assets like Litecoin and technology stocks. At the same time, the yield curve has continued to invert, signalling that the bond market expects interest rates to be much higher.

Meanwhile, on-chain data compiled by Santiment shows that activity in Litecoin’s network is still strong. This week, the ecosystem saw the largest amount of daily purchases by whales. This is a sign that large investors are optimistic that the network will continue doing well.

Litecoin Price Prediction

LTC/USD rose to a multi-month high of $134 in March as the cryptocurrency momentum accelerated. In the past few days, this trend has reversed and the coin has moved to the lowest level since March 24th. It has crossed the important support at $116, which was the highest point on March 1. The coin has also moved below the 25-period and 50-period moving averages. It has also crossed the 50% retracement level.

Therefore, the coin will likely retest the $116 level and then resume the bearish trend as bears aim for the support at $107.