USD/MXN neutral at 21.86, US 10-year yields above 2.50%

Currently, USD/MXN is trading at 21.86, down -0.40% on the day, having posted a daily high at 21.99 and low at 21.84 ahead of Trump's inauguration ceremony. 

To note, historical data indicates that USD/MXN had its highest performance clocked at +1.83% gain (Jan.10), and the lowest at -1.27% (Jan.13).

Reuters reports as what to expect in the near term 'if' Trump fires immediate tangible actions, "Mexico's peso could sink to a record low after Donald Trump assumes the U.S. presidency on Friday if he unveils any aggressive actions that could hammer the exports of Latin America's No. 2 economy, traders and analysts said. Mexico's peso has sunk more than 16 percent since Trump won the election. Trump threatened to rip up or renegotiate the NAFTA free trade deal with Mexico and Canada and impose tariffs on Mexican exports."

Soros doom and boom
Bloomberg reports, America has elected a would-be dictator as president, the European Union is disintegrating, U.K. Prime Minister Theresa May won’t last long as her nation prepares to secede from the EU, and China is poised to become an even more repressive society, the investor told Bloomberg Television’s Francine Lacqua from the World Economic Forum in Davos.

The report continues, “It is unlikely that Prime Minister May is actually going to remain in power,” Soros said. She has a divided cabinet and base and Britons are in denial about the economic impact of Brexit, he said."

Brown Brothers Harriman constructive US Dollar outlook

Marc Chandler, Global Head of Currency Strategy, notes that their outlook is based on the divergence of monetary policy, broadly understood, and the political risks emanating from Europe. Since the spring, we have anticipated that the next US administration would compliment the less accommodative monetary policy with fiscal stimulus and recognized the bullish implications of the policy mix. Our view then puts emphasis on interest rates in absolute terms and also relative to Europe and Japan.

Trump's inauguration

Chandler further writes, "US 10-year bond yields bottomed this week on Monday near 2.30% and now are pushing above 2.50% for the first time since January 3. This is lending the dollar some support. The dollar bottomed on Wednesday a little below JPY112.60 and is now trying to establish a foothold above JPY115.00. The euro peaked on Tuesday near $1.0720. Yesterday's push below $1.06, seemingly on the back of Yellen's confidence, was rejected and the euro was squeezed back to almost $1.07 today in Asia. However, activity remains choppy, and the single currency is back near $1.0630 before the North American."

USD/MXN Technical levels to watch

In terms of technical levels, upside barriers are aligned at 21.97 (horizontal resistance) and above that at 22.00 (psychological mark). While supports are aligned 21.84 (horizontal support level) and below that at 21.74 (near 100-SMA). Furthermore, prices gravitate below its 50-SMA; worth noting. 

On the long-term view, if Trump's Agenda fails to impress aside from the ongoing rhetoric, then the Mexican Peso has some room to appreciate and judging the next logical level to target clocks at 19.86 (short-term 61.8% Fib). However, that requires some impressive failure from Trump and his camarades.   

Today’s the day!