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The Mexican Peso (MXN) trades broadly unchanged in its key pairs on Friday, with USD\/MXN flatlining as the US Dollar (USD) stabilizes after its recent sell-off and market sentiment<\/a> remains relatively calm heading into the weekend.<\/p>\n At the time of writing, USD\/MXN is trading at 16.70, EUR\/MXN at 18.14 and GBP\/MXN at 21.15.\u00a0<\/p>\n The Mexican Peso holds the line in its major pairs as a lack of market moving data and geopolitical shocks keeps volatility to a minimum.\u00a0<\/p>\n On Thursday the US released a mixed bag of data that did not really change the outlook for the economy or interest rates, a key driver for FX. The same went for Europe and the UK.\u00a0<\/p>\n Regarding the US data, the results were as follows:<\/p>\n Apart from the data, several US Federal Reserve (Fed) officials commented on Fed monetary policy, but their words were interpreted as neutral and had little impact.\u00a0<\/p>\n The President of the Richmond Fed Thomas Barkin said inflation is coming down, but that it will \u201ctake more time\u201d to hit the Fed\u2019s target.\u00a0<\/p>\n Cleveland Fed President Loretta Mester, meanwhile, welcomed the latest CPI data but said monetary policy is well-positioned.<\/p>\n Atlanta Fed President Raphael Bostic<\/a> said he was pleased with the progress on inflation in April but that the Fed needed to \u201cbe patient and vigilant.\u201d<\/p>\n In Europe, European Central Bank (ECB) executive board member Isabel Schnabel, meanwhile, said an interest rate cut in June may be appropriate but the \u201cpath beyond June is much more uncertain.\u201d<\/p>\n So, to sum up, no big changes there and business as usual.\u00a0<\/p>\n USD\/MXN \u2013 the value of one US Dollar in Mexican Pesos \u2013 trades sideways after the massive sell-off on Wednesday.<\/p>\n The consolidation after the steep decline could possibly be the early beginnings of a Bear Flag continuation pattern, although it is still early to say for sure.\u00a0<\/p>\n Ever since breaking out below the bottom of its range at 16.86 on May 9, the pair has looked like it has been in a short-term downtrend, favoring shorts over longs.\u00a0<\/p>\n If USD\/MXN breaks below the May 15 lows of 16.64, it will probably confirm the start of the next leg lower.\u00a0<\/p>\n More downside would likely reach the conservative target for the breakout of the mid-April to May range at 16.54, which is the 0.618 Fibonacci<\/a> ratio of the height of the range extrapolated lower.\u00a0 Further bearishness could even reach 16.34, the full height of the range extrapolated lower.\u00a0<\/p>\n Given the medium and long-term trends are bearish, the odds further favor more downside.\u00a0<\/p>\n It would take a recovery and decisive break back inside the range (above 16.86) to reverse the downtrending bias.<\/p>\n A decisive break would be one accompanied by a longer-than-average green candlestick that closed near its high or three green candlesticks in a row.\u00a0<\/p>\n The Building Permits released by the US Census Bureau<\/a>, at the Department of Commerce<\/a> shows the number of permits for new construction projects. It implies the movement of corporate investments (US economic development). It tends to cause some volatility to the USD. Normally, the more growing number of permits, the more positive (or bullish) for the USD.<\/p>\nMexican Peso stable after midweek volatility<\/h2>\n
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\u00a0<\/li>\nTechnical Analysis: USD\/MXN threatens to go lower<\/h2>\n
USD\/MXN 4-hour Chart\u00a0<\/h3>\n
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Economic Indicator<\/h2>\n
Building Permits (MoM)<\/h3>\n