- The Mexican peso remains firm against the dollar.
- USD/MXN heading for the lowest close since July, could go towards the bottom of 2021.
USD/MXN is falling on Monday and is trading at the lowest level since July 2021, around 19.75. Downside pressures remain intact and reinforced on Monday after the return below 19.80.
If it continues at current levels, further declines would be expected in the USD/MXN, with the next strong support seen at the 19.50 zone., with an intermediate one at 19.65. If it reaches 19.50 in the next sessions, a rebound would be expected before a downward continuation
In case of a return above 19.80, the USD/MXN could gain support for a consolidation in the short term. The next resistance is around 19.95. If this level is exceeded, a signal of a possible short-term floor would be given.
The advance of the Mexican peso occurs despite the fact that the climate of caution in the markets still prevails in the face of signs of a possible recession ahead in the US, the war in Ukraine and the rise in interest rates. All of the above is being overshadowed by the rise in the price of raw materials.
The advance in the price of commodities overshadowed the negative impacts and is a key factor behind the rise in Latin American currencieswhich in the last week were among the best performers.
In the event of a general deterioration in the equity markets, the Mexican peso could be affected, driving the USD/MXN higher. If the current climate continues or if there is a better one, the peso rally could continue.
Technical levels
Source: Fx Street
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