- The Mexican peso continues to rise against the dollar as markets recover.
- DXY extends bearish correction and suffers worst daily loss in months.
- The drop below 20.00 further weakens the USD/MXN pair.
The USD/MXN falls on Tuesday for the sixth day in a row. He bottomed at 19.92, the lowest level since April 19, and then bounced back towards 20.00.
The Mexican peso continues its rally against the dollar for the sixth consecutive day. It reached the highest level in almost a month. The MXN has been one of those that has risen the most in the last five days, after a new rate hike by Banxico.
The improvement in risk appetite in financial markets seen in recent days pushed USD/MXN lower. It was also weakened by higher crude oil and commodity prices. The dollar index falls for the third day in a row, posting the worst drop in months on Tuesday. The USD trimmed losses after the release of US economic data, which beat expectations.
April lows are back on the radar
Consolidation below 20.00 could open the door for a drop towards the next support zone at 19.85. A drop below would expose the April low at 19.72. A weekly close clearly below 19.70 would reinforce the medium-term outlook for the Mexican peso.
If the dollar recovers above 20.00, it would relieve the downward pressure. The next resistance is located at 20.07, followed by 20.22. Critical resistance remains at 20.45: A consolidation above would target the 20.70 area.
USD/MXN daily chart
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Technical levels
Source: Fx Street
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