- Mexican peso and emerging currencies rise sharply against the dollar.
- USD / MXN falls for the third day in a row.
The USD / MXN continues to decline and is trading at the 20.70 zone, the lowest level in a week. The price has been downhill since Tuesday, the day it reached 21.50. The key factor is the rise in stocks and the decline in the dollar.
Emerging market currencies are being the stars of the week. The fall in Treasury yields along with the rise in equity markets is being an important fuel. In addition to a weak dollar.
As long as the previous conditions hold, the rally could continue in emerging markets. In the case of USD / MXN, the fall implied the breaking of uptrend lines and horizontal supports.
In case of continuing with the retracement, the next strong support can be found around 20.50 / 55, that could lead to a rebound and / or profit taking. Below it will appear 20.30.
The very short-term bias remains bearish. Despite the fact that the decline has been significant, which should warn about its possible exhaustion, there are no signs of correction yet or that there could be a change in the short-term trend.
In a broad perspective, the pullback from 21.60 took strength from the dollar, but the outlook is still bullish., especially with the price above the 20-day average (20.62) and 20.30. If you lose this last level, then you could go to a neutral bias.
Technical levels
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