- The Mexican peso among the best performers on Tuesday amid declining yields.
- USD / MXN breaks below 21.60 and falls to 21.27, the lowest level since last Wednesday.
The USD/MXN it broke below 21.60 and fell to 21.27 reaching the lowest level in nearly a week. Recently, it rallied back above 21.40 and trimmed losses following some aggressive comments from Fed Chairman Powell.
MXN rises, but loses strength
The Mexican peso went from oversold to overbought levels in a few days. The USD / MXN is falling sharply, however, it trimmed the losses. A weaker US dollar across the board was the key event, and so was a stronger MXN.
During the last hour, Powell in the Senate mentioned that it is time to withdraw “transitory” as a description of inflation, which triggered a fall in Treasuries. The rally in yields boosted the dollar across the board, pushing the USD / MXN back above 21.40.
It looks like the volatility will continue for the next few hours. Price movements were also exacerbated ahead of Powell’s comments on month-end flows.
A recovery above 21.60 would weaken the Mexican peso, while a consolidation below 21.45 would keep the support area at 21.30 exposed.
Technical levels
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