- The Mexican peso and emerging market currencies advanced modestly against the dollar.
- USD/MXN continues to pressure the 20.30/35 support.
- Fed minutes in the afternoon can generate noise.
The USD/MXN is falling for the fourth day in a row, although it remains above the 20.30/35 zone, which since the end of last week has stopped the declines. The good tone of the market on Tuesday helped the Mexican peso, which remains firm despite the cautious climate on Wednesday.
The USD/MXN technical bias remains clearly bearish, although to enable more lows in the very short term the cross has to break 20.35. A daily close below 20.30 would point to more declines with next supports at 20.15 and 20.05.
To the upside, the first resistance appears at 20.45, followed by 20.58, where the 20-day moving average is. A daily close above 20.70 will be a factor that may trigger a firmer rally towards 20.85.
US retail sales data released minutes ago showed a better-than-expected rise in January, but the data didn’t have much of an impact. The minutes of the meeting will be published in the afternoon. last Fed meetingwhich can bring movement to the market.
The support for the Mexican peso these days has been in the rise in oil, some weakness in the dollar and on Tuesday in the recovery of the stock markets. So far in 2022, the best performing emerging currency is the Brazilian real, followed by the Chilean peso and then the South African rand. The Mexican peso is far from the podium, showing a small rise against the dollar.
Technical levels
Source: Fx Street
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