- USD / MXN fails to break the medium-term trend line, falls back towards 20.00
- Risk appetite supports the Mexican peso, Banxico meeting Thursday.
The USD/MXN it is trading modestly higher on Monday, after falling sharply on Friday due to a general decline in the US dollar and supported by appetite for risk in financial markets. What happens on Wall Street is still important to the cross. The Bank of Mexico meets on Thursday, a rate cut is expected.
Last week, the USD / MXN failed to stay above 20.40 and fell back. The upward momentum eased favoring a downward correction. The pair remains above the 19.95 / 20.00 zone, which is critical support, where the 20- and 55-day moving averages converge, and a horizontal and psychological support. A close clearly below 19.95 would weaken the outlook for the dollar.
At the moment, USD / MXN is consolidating above the 20.00 area, showing a modest bullish bias, but to clear the way to more gains, it needs to make a firm break above 20.40, targeting 20.60. Above the next strong resistance stands at 20.80.