- The dollar cuts losses in the second half of the American session, with its eyes on the elections.
- USD / MXN bounces off the 21.00 zone and returns to 21.30.
The The Mexican peso, like most emerging market currencies, is rising against the dollar on Tuesday, although the greenback cut losses in recent hours. On the day of the presidential elections in the US, the USD / MXN fell to 21.01, but recently climbed to 21.31. It remains just below 21.30, with a slightly bullish intraday bias, but negative for the day.
From a technical point of view, the USD / MXN remains trading sideways, back above the 20-day moving average that is passing through 21.18. On the upside, the level to watch is 21.50, a horizontal resistance and where the 50-day moving average is passing. The break of this level would strengthen the dollar.
On the downside, immediate supports for USD / MXN are seen at 21.15 and 21.00. Below, a new test to the area of the September and October lows around 20.80 / 85 would be expected, whose break would strengthen the Mexican peso.
Waiting for the elections
The The dollar in general has cut losses during the second half of the American session, and the main Wall Street indices aim to end the day in the green but not at the highs, lor which reflects that optimism about the outcome of the elections is limited and that caution seems to predominate.
The great fear is that the winner will not be known in the US early Wednesday, which can lead to legal disputes and possible protests in the streets. In turn, the impact on the market will depend on how the composition of Congress turns out.
The Mexican peso Unlike four years ago, this time he is not exposed to Trump risk. Relations between Mexican President Andrés Manuel López Obrador and his American counterpart have been cordial, which is why he would not be affected if he continues in the White House. The risk for the Mexican peso comes from the side of the impact on Wall Street, since if there is a fall in the share price, it would be affected. On the contrary, if there is a rally, it could be expected that Mexican assets will rise to it.
At 23:00 GMT the first polling places in the US will close. The volatility in the markets could increase with the passing of the hours and with the emergence of numbers of exit polls, polls and partial official results.
Credits: Forex Street
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