- The Mexican peso falls after having the highest close in almost a month against the dollar.
- USD / MXN with support at 20.15, and resistance at 20.30.
USD / MXN is rising Monday after having the lowest daily close in nearly a month on Friday. The price last week fell to 20.12 and is operating in the pre-session of the American session at 20.22, the maximum of the day. The advance is given before a strengthening of the dollar throughout the market.
The greenback is gaining momentum before the growing expectation for what will be the next meeting of the Federal Reserve next week. Powell on Friday gave firmer signals that a cut is coming and warned of higher inflation than expected, this generated an appreciation of the dollar. Another factor that keeps the greenback strong is the rise in Treasury bond yields. The 10-year rate remains firm above 1.65%.
A positive factor for the Mexican peso is the rise in the price of oil and the (moderate) advance in the equity markets on Monday. Economic data from Mexico released on Monday was not entirely encouraging. On the positive side, the unemployment rate in September went from 4.1% to 3.9%, but the index of economic activity in August registered an unexpected contraction of 1.60%, making that with respect to 12 months ago, there has been an expansion of 4.3 %, below the 6.5% expected and 7.1% compared to the previous month.
Regarding technical issues, USD / MXN has found a significant barrier around 20.15. A close below that level would point to more weakness ahead, with a test at 19.97 included. In the short term, a greater upward rebound could be expected, with the relevant resistance being at 20.30. A consolidation on this area would leave the dollar with a new support. Already above 20.45, the dollar could regain the initiative.
Technical levels
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