Raises rate to 6.25% from 5.75%

The Banxico raised rates by 50 BP to 6.25% from 5.75% in an effort to stay ahead of the currency weakness and 2nd round CPI effects.

Technically, the pair broke above the 100 hour MA (blue line in the chart above) on Tuesday and tested the 200 hour MA (green line in the chart above). Resistance against the 200 hour MA held, but so did support against the 100 hour MA on the dip (on Tuesday).

Yesterday there was another test of the 200 hour MA (green line) and once again sellers kept a lid on the pair. Advantage sellers/bears.

The dip yesterday did not hold the 100 hour MA and the pair found seller near the 100 hour in trading today.

The move higher has pushed the price to new session lows, but the lows from last Friday and Monday are so far holding (the low did dip below the Monday low but is back above).

The bears have the advantage, but buyers against the low are also making a play. The thinking might be that the Banxico gun has been shot and there are no more bullets left in the chamber. Advantage - or risk- goes back to a Trump move/quote that offsets some of the gains the MXN has made since peaking on January 19th (see daily chart below). If the price does break the low, however, look for stops - and buyers turning to sellers - with a test of the 100 day MA at 20.1933 the next target.

PS The 100 and 200 hour MA remain as key hurdles to get to and through if the pair is to start bottoming.