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Forex: USD/MXN consolidates below 12.0000

FXstreet.com (Barcelona) - The Mexican peso is retreating from weekly highs around 11.9600 against the greenback on Thursday after consumer prices in the Aztec economy posted an annual increment of 4.65% in April, higher than March’s 4.25%. This is the third consecutive week the peso is advancing against the buck, dragging the cross from the boundaries of 12.4000 at the end of April to today’s lows below the key 12.0000 level.

“Driven by the reforms momentum and rally in US equities, the peso has strengthened beyond our 12.23 forecast for Q2. While we think that the move may be overstretched in the short term, we do see USD/MXN at 12.05 in Q4 and 12.01 in Q1’14”, commented M.Budkiewicz, Strategist at TD Securities.

At the moment, the cross is up 0.07% at 11.9855 with the next resistance at 12.1250 (high May 6) ahead of 12.2495 (high May 1) and finally 1.2969 (high Apr.24).
On the downside, a break below 11.9650 (low May 8) would expose 11.5240 (low Jul.29 2011).

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