- The dollar remains firm in the face of decline in the markets.
- USD/MXN rises for the fifth day in a row.
USD/MXN is trading at the 20.21 zone, in positive territory for the day after bouncing from 20.10. The outlook remains bullish, with an eye on Friday’s high at 20.26.
The area between 20.25 and 20.30 is the key resistance on the upside. If the USD/MXN is exceeded, it would reinforce the upward bias. In the opposite direction, the first support appears at 20.10 and below it the next one is at 20.00. A confirmation below the latter would ease bullish pressures.
The bullish tone of the pair is behind a stronger dollar throughout the market and risk aversion. The main Wall Street indices are falling around 1.5%. At the same time, the prices of raw materials are also falling.
The complicated expectation about global economic growth, added to that of an aggressive Federal Reserve, generate pessimism in the equity markets and keep Treasury bonds in the area of maximums in months. All of this contributes to both a stronger dollar and weakness in emerging market currencies.
The key event ahead is the Jackson Hole symposium where leading central bankers will speak. It begins on Thursday, the same day that the minutes of Banxico’s last meeting will be published. Jerome Powell will exhibit in Jackson Hole on Friday.
Technical levels
Source: Fx Street
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