USD/MXN continues to push lower, targets 20.30

  • Mexican peso remains firm in the market.
  • Rise in equity markets drives decline in USD/MXN.

USD/MXN is falling moderately on Tuesday and continues downhill after posting the lowest close in a month on Monday. The cross continues to approach the 20.30/35 zone, a key technical level, and the last strong barrier for 20.00.

The advance of the Mexican peso against the dollar had a positive factor behind it, which was the rise in the stock markets. Equity markets rallied around the world on news of the withdrawal of “some” Russian troops from the Ukraine border.

The positive climate is good for emerging market currencies. The limit to increases in the value of these assets comes from the side of the rise in yields on Treasury bonds and the decline in the price of oil and other raw materials.

Technically the USD/MXN maintains the bearish bias, and continues to press on the 20.30/35 area, which is a strong horizontal support and where the 200-day moving average is also passing. A close below would pave the way for more downside with an initial target at 20.15 and then an attack at 20.00/05.

If it manages to hold above 20.30, the USD/MXN could attempt a recovery. The first resistance appears at 20.55, which protects the most important level of 20.70. A daily close above this latest level would ease downside pressure and expose next resistance at 20.85.

Technical levels

Source: Fx Street

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