Mexican peso remains under pressure and the dollar returns above 20.50

• USD / MXN rises for the sixth day in a row.
• Mexican peso has the worst week of the year against the dollar.

The USD / MXN is closing the week with a new rise, although it has not yet set new monthly highs. The price is back above 20.50, looking at the 20.62 reached on Thursday (the highest since the end of March).

The Deterioration in the financial markets climate together with the dollar rally continue to drive the USD / MXN strong., which in a few days went from lows in almost a year to highs in months. Even now it is back above the 200 day moving average.

The technical outlook now favors the bullish scenario, but in a context of increasing volatility that also implies the existence of significant setbacks. As long as it remains above 20.50, a test of the next resistance at 20.60 / 65, which protects at 20.85, would be expected.

Banxico warns and decides next week

After the impact of the meeting of the Federal Reserve this week, next Thursday it will be the turn of the Bank of Mexico. The interest rate is at 4% and is expected to remain at that level. Now the bias is turning to a possible rise, given the rise in inflation and in line with what the central bank of Brazil has done, for example.

In the Banxico week, in the Financial Stability Report, warned of the existence of risks in the financial system, given an adjustment in global financial conditions and greater volatility. Regarding Mexico in particular, he sees as risk factors the prolonged weakness of domestic demand and the risks of sovereign debt ratings due to the situation and the state oil company.

Technical levels