USD / MXN bounces after reaching 20.05, the low in seven weeks

  • The Mexican peso fell against the dollar, but kept the tone in favor.
  • Emerging Market Currencies Under Pressure As Treasury Yields Rise.

USD / MXN fell in the Asian session to 20.05, the lowest level since mid-February. After which a rebound began that extended to 20.22, matching Thursday’s high. It is trading at 20.15, in positive territory for the day, but still with bearish signals.

The rebound from the strong support at 20.00 / 05, coupled with a recovery in the dollar, pushed the USD / MXN to the 20.20 zone, which for the time being held back gains. In the very short term, some bullish tone is seen, but on a larger perspective, the bearish bias still prevails.

To enable more lows, the USD / MXN has to break the strong barrier seen at 20.00 / 05. Below the next support is at 19.90 and then at 19.75. To the upside, a rally above 20.20 / 25 would ease downward pressures, while above the key zone is 20.50 / 55.

The backward movement of Mexican peso finds some support in the mood of the market. Stock markets are rising, which helps limit the weakness of currencies such as the Mexican peso. One of the keys to look at is in the bond market. The 10-year rate climbed to 1.68% following US wholesale inflation data. It then fell back a bit, pushing the dollar down.

Technical levels

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