USD/MXN Monthly Forecast: January 2025 (Chart)

(MENAFN- Daily Forex)

• The US dollar has continued to rally rather significantly against the Mexican peso over the last several weeks, but we do get the occasional pullback.
• I think this continues to be the case, mainly due to the fact that the Donald Trump inauguration is in the month of January, and this of course will have major implications for this currency pair.
• After all, there is plenty of rhetoric coming from Donald tromped that could make life difficult for Mexico, but he also has a reputation for being a little over the top and coming back down with a more reasonable position.

Various Factors

There are a whole host of issues that could come into the picture during the trading of this currency pair, so it is important to pay close attention to the idea of immigration being crushed at the US/Mexico border, which has a major influence on what happens next in this USD/MXN currency pair , due to the fact that there are so many remittances sent back from America into the Mexican economy. In other words, with less migrants crossing the border, it means that there will be less money flowing back into Mexico from America.

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Furthermore, if there are tariffs levied against the Mexican economy, this will be like an asteroid hitting the Yucatán Peninsula yet again. If this does in fact end up being the reality, the Mexican economy will be slammed. On the other hand, if we get a situation where tariffs are avoided, that might help the Mexican peso a little bit against the US dollar. However, the same time, we have the issue where interest rates in the United States continue to climb, and that is something that continues to keep the US dollar strong. I think that ends up being the case over the longer term, but this is a pair that may have to spend some time trying to sort out what the new administration does.

EURUSD Chart by TradingView

On pullbacks, the 20 MXN level should be support. It's also worth noting that we recently had a so-called“golden cross” on the weekly chart, which is a bullish sign as well. This is when the 50 Week EMA crosses above the 200 Week EMA, suggesting that momentum is starting to pick up to the upside. If we can break above the 21 MXN level, it's likely that the US dollar swallows the Mexican peso whole.

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