- Risk aversion climate weakens emerging market currencies.
- USD / MXN remains near the highs with the bullish tone intact.
The advance of the dollar on all fronts led the USD / MXN to break above 21.00, giving further strength to the bullish rally. The main factor is being the negative climate in the stock markets. The sharp fall on Wall Street clouded expectations for the future, putting pressure on riskier assets.
The price reached 21.25 and remains close to that level. Resistance can be found around 21.35 and then above it at the 21.50 area. Despite the progress of the rally, there are no signs of a possible correction.
The Technical indicators on the day chart are showing near overbought extremes, but bullish momentum remains strong in USD / MXN. A recovery in the stock markets could favor a downward correction. Supports from the current level can be seen at 21.00, followed by 20.80 and then 20.60. The latter is a very strong barrier, which to be broken will need high impact tours in the markets of weak dollar or rebound in the stock markets.
If the downs on Wall Street persist, increases in Treasury yields, the USD / MXN will have fuel to continue rising beyond the overbought indications. In the US on Friday the employment report and other data will be published, which may go unnoticed considering what happens with bonds and stocks.
Technical levels
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