The Mexican Peso extended its decline on Tuesday, tumbling further after virtual President-Elect Claudia Sheinbaum’s Monday press conference reaffirmed her commitment to the controversial judiciary reform. This heightened investor anxiety, driving the USD/MXN exchange rate up to 17.48, a gain of over 1.50%.

The pair reached a peak of 18.57 following Sheinbaum’s confirmation of prioritizing the “Plan C” program, which encompasses extensive constitutional changes, including judicial reform, dissolution of autonomous bodies, and overhauling the electoral commission.

Meanwhile, President Andres Manuel Lopez Obrador (AMLO) stressed the urgency of these reforms, urging their approval in September when the new Mexican Congress takes office. This political turmoil overshadows recent economic data, with April’s Industrial Production showing a monthly decline but annual growth exceeding expectations.

Market Drivers: Political Uncertainty and Peso’s Fate

• Judiciary Reform: Investor unease over the potential impact of the proposed reforms on Mexico’s institutional framework is a major driver of the Peso’s weakness.
• US CPI and Fed Decision: The upcoming release of US Consumer Price Index (CPI) data and the Federal Reserve’s monetary policy decision are also on traders’ radars.
• Economic Data Takes Backseat: The release of Mexican industrial production data has been overshadowed by political uncertainty.

Technical Analysis: USD/MXN Eyes 19.00 amid Bullish Momentum

The USD/MXN pair maintains a bullish bias, with price action suggesting further upward movement due to political instability. The next resistance levels are at 18.48 and 18.57, followed by the key psychological level of 19.00. Further resistance lies at 19.23 and 20.00. To regain control, sellers would need to push the pair below the April 19 high of 18.15.