USD/JPY trades at 159.359 after gaining 41 pips from Monday's open, with Tokyo inflation data and US GDP the key tests ahead.
USDMXN opened Monday at 17.3529 and closed Friday at 17.3216, a modest 31-pip decline for the week. The pair traded in a 170-pip range between 17.2526 and 17.4265, with Tuesday's spike to 17.4009 marking the week's high point before sellers stepped in.
Thursday brings the main event: US Preliminary GDP for Q1 at 12:30 UTC, expected to show 2.1% annualized growth versus 0.7% previously. The same release includes Core PCE Price Index month-over-month, forecast at 0.3%, matching the prior reading.
Beyond the US data, traders will monitor Australian CPI on Tuesday (01:30 UTC, forecast 4.4% yearly), the RBNZ rate decision Wednesday (02:00 UTC, expected to hold at 2.25%), and Canadian GDP on Friday (12:30 UTC, forecast 0.1% monthly). Monday sees major bank holidays across the US, UK, and Europe, potentially thinning liquidity.
If US GDP beats the 2.1% forecast, peso sellers could target the Tuesday high at 17.4265 as first resistance. A break there opens 17.4500. If GDP disappoints and Core PCE softens, the week's low at 17.2526 becomes the obvious downside target.
The RBNZ decision adds a wildcard. Any surprise rate cut would likely strengthen USD crosses broadly, including USDMXN. Australian CPI above 4.4% could also provide indirect dollar support through risk-off flows.
Retail positioning shows 61.7% of traders are long USDMXN versus 38.3% short as of Sunday morning. This long skew suggests the crowd expects peso weakness, though extreme positioning often marks turning points. The bias has room to extend before reaching concerning levels.
The Tuesday high at 17.4265 stands as immediate resistance if buyers regain control early. Below, the week's low at 17.2526 offers support, with 17.2500 just beneath as a psychological round number. The 17.3000 handle sits between current price and support, acting as a pivot. These are reference levels, not entry signals.
Byline: LHFX Research
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EUR/USD sits at 1.16379 after grinding sideways for three days, with positioning nearly balanced at 51.6% long.
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