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USD / MXN accelerates decline below 20.00, to two-week lows

  • Dollar weakness pushes USD / MXN down.
  • Mexican peso remains firm, and rises for the seventh day against the dollar.

The USD / MXN is falling on Thursday for the seventh day in a row and remains bearish, approaching the next support which is at 19.80. The main factor in the last bearish leg was the weakness of the dollar. It is trading at the lows since July 16 at 19.83.

The Greenback lost ground after the Federal Reserve meeting. Although no changes were announced, and the road is heading towards the removal of stimuli, the time horizon has not come closer. This left the dollar down and equity markets with a boost.

The The rise in the stock markets plus the weakness of the dollar, was reflected in a greater demand for assets from emerging markets. If the good tone persists, the Mexican peso would be positioned to continue the increases.

Data released Thursday from the US did not help the dollar. GDP growth was lower than expected in the second quarter and a lower than expected decline in unemployment benefit requests.

Technical factors helped the downward path of USD / MXN. The close below 19.95, which is where the average of 20 and 55 days is, in addition to a horizontal level, strengthened the bearish tone. If it continues, the price will face an important support zone around 19.80, and then 19.74, the low of July. In case of returning on 20.05, the downward pressure would be relieved.

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