- Mexican peso accelerates recovery counting the dollar.
- The greenback is affected by falling Treasury bond yields.
- USD / MXN with next support at 21.30.
USD / MXN is falling significantly on Tuesday, with the Mexican peso among the best performing currencies. The cross traded above 21.80 in the Asian session and recently fell to 21.40, the lowest level in almost a week.
The The sharp fall is due to the combination of a weaker dollar in the market as a result of the sharp decline in the yields of Treasury bonds, which made it stronger. Also, a correction in USD / MXN was expected after the strong rally. Now the question will be if the pullback is being exaggerated.
The break below 21.60 triggered more losses at the crossover. The next support is seen at 21.30. The dominant trend continues to be upward, although in the short term the tone is in favor of the Mexican peso. The USD / MXN went from showing overbought levels on the day charts to being strongly oversold on the very short-term charts.
The direction of the USD / MXN is not expected to escape the general tone of the financial markets. In the event of a rebound in the equity markets, it would be weakened, although it will also depend on what the Treasury bonds do. The best scenario for the Mexican peso will be that of rises in the stock markets and at the same time a stability in the yields of the Treasury bonds.
A return above 21.60 in USD / MXN would give the dollar more momentum and could expose 21.90, the next resistance and protection at 22.00.
Technical levels
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