Today, the Mexican peso slumped more than 0.4%, allowing the USD/MXN pair to make a 0.66% whopping gain. The fall in the peso currency came out of a market reaction to the Mexican government's stance to help out the most indebted oil firm - Pemex. The government proclaimed that it would recapitalize Pemex, helping it build a new refinery with less tax burden. This initiative was set under motto to help the firm raise production from onshore and shallow-water fields. Somehow, the market participants appeared to stay bit unpleased over government's take.
This year, most of the Credit Rating firms like Fitch, Moody's, and S&P had already downgraded this firm, considering its massive debt burden. Quite surprisingly, the bulls gathered enormous energy and breached all the significant overhead SMAs, marking the day's high at 10.0955 level.
The Aussie pair appeared to move out-of-track in the early hours, disrespecting a 6-day old ascending slanting support line. After opening near 0.7039 level, the AUD/USD pair kept losing the tempo since then. The slump in the Aussie pair came following the release of RBA meeting minutes. The policymakers addressed that the Bank would keep the doors open for further ease in the monetary policy by a quarter-point soon. Notably, the Bank had already exercised rate cuts twice since June.
Nevertheless, the July Minutes read , "Lower interest rates would provide more Australians with jobs and assist with achieving more assured progress towards the inflation target".
The Greenback displayed some positive drifts on Tuesday amid upbeat June Retail Sales data release. The June Retail Sales Control Group reported 0.4% above the consensus estimates of around 0.3%. However, the US Dollar Index managed to keep the daily movements intact within the 1-month old symmetrical triangle.
The Cable showcased a strong downtrend today. After making a downward rebound price action on July 15, the GBP/USD pair had hardly seen any upside. Also, the robust 1.2517 support-turned-resistance stood as one of the substantial barriers, restricting pair's positive movements. On the economic event front, the May 3Mo/Yr Average Earnings Including Bonus reported 0.2% above the previous 2.4%.
On the contrary, the June Claimant Count Change, which computes the change in unemployed people in the UK reported poor figures. This time, the Unemploymen t report came around 38.0K, 13.5K higher than the previous records. On the Brexit front, the Britishers continued to remain tensed, fearing a hard Brexit as new UK PM joins the office on July 24. Also, the BoE Governor Carney changed his tone to a dovish one, stating downside risks for the economy amid trade tensions and Brexit chaos.
The Euro pair suffered some huge pullbacks today. Also, the Relative Strength Index ( RSI ) appeared to drop below 14 mark, revealing strong disinterest among the buyers. Anyhow, laterwards, the firm 1.1210 support level, acted as a savior, providing a stoppage to the drowning Fiber . In the meanwhile, a strong conflux containing significant SMAs ensured to confine pair's upside.
The disappointing July ZEW Survey - Economic Sentiment seemed to play a vital role in leading the bears. This Sentiment Index reported -24.5 points over the last -21.1 points.
This article was originally posted on FX Empire
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