- Emerging currencies continue with a negative outlook due to a cautious climate in the market.
- USD/MXN rises for the fifth day in a row.
USD/MXN is rising again on Wednesday, racking up five straight days of gains. The price reached the highest level since March 18 at 20.51. At the moment, it has not managed to stabilize above 20.50, although it keeps the bullish tone intact.
The Mexican peso does not escape the generalities of emerging market currencies, although it is far from being the worst of the group. The drop in the equity markets and the correction in the price of commodities are having a negative influence. The deterioration in growth expectations throughout the world is a key factor in the caution among investors, caused by the war in Ukraine, the restrictions in China and the rise in interest rates.
to persist the negative weather It will be difficult for the Mexican peso to advance against the dollar. A recovery in equity markets could trigger a correction in USD/MXN.
In the short term, the USD/MXN it continues to point higher and is testing a key area which is 20.50, level close to the 200-day moving average. A close above will enable further upside in the short term with the next strong resistance at 20.70. In case of not being able to overcome 20.50, the probabilities of a correction would increase. Pullbacks to 20.20 can be seen as corrective.
Technical levels
Source: Fx Street
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