USD/MXN falls to its lowest level since January 2021, near 19.50

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  • The Mexican peso is among the best performers on Friday.
  • USD/MXN is trading at the lowest level since January 2021.
  • The appetite for risk, the weakness of the dollar and an aggressive Banxico support the rise of the MXN.

The USD/MXN is falling sharply on Friday, with the Mexican peso leading across the board. The pair fell to 19.56, hitting the lowest intraday level since January 2021.

The combination of technical factors, dollar weakness, steady US yields and risk appetite pushed USD/MXN further lower. It is heading for the lowest weekly close since March 2020.

The break below the support zone around 19.70 added downward pressure. The next critical support is seen at the 19.50 area followed by 19.30. To alleviate the downward pressure, the dollar needs to get back above 19.90.

Stock markets rise again on Friday. On Wall Street, the S&P 500 gains 1.64% and is up more than 5% for the week. The main indices are about to register the first gain after seven consecutive weeks of falls. Improved market sentiment boosted demand for emerging market currencies.

The weakness of the dollar and the stability of the yields also contribute to the decline of the USD/MXN. DXY falls 0.15%, about to post the lowest daily close since April 25. At the same time, US yields remain stable, not reacting to risk appetite. The 10-year US Treasury bond yield stands at 2.72%, slightly above the weekly low.

Another positive factor for the Mexican peso was the “aggressive” minutes of Banxico’s last meeting, in which it raised rates by 50 basis points, to 7%. “The minutes show that more policymakers were open to a bigger move, as another said it would bolster the bank’s autonomy and have more of an impact on long-term inflation expectations,” analysts at Brown Brothers Harriman said. The next council meeting is June 23.

USD/MXN weekly chart

Technical levels

USD/MXN

Panorama
Last Price Today 19.6042
Today’s Daily Change -0.1628
Today’s Daily Change % -0.82
Today’s Daily Opening 19,767
Trends
20 Daily SMA 20.1086
50 Daily SMA 20.0915
100 Daily SMA 20.3347
200 Daily SMA 20.44
levels
Previous Daily High 19.8672
Previous Daily Minimum 19.7595
Previous Maximum Weekly 20.1838
Previous Weekly Minimum 19.8281
Monthly Prior Maximum 20.6382
Previous Monthly Minimum 19.7269
Daily Fibonacci 38.2% 19.8007
Daily Fibonacci 61.8% 19.8261
Daily Pivot Point S1 19.7286
Daily Pivot Point S2 19.6903
Daily Pivot Point S3 19,621
Daily Pivot Point R1 19.8363
Daily Pivot Point R2 19.9056
Daily Pivot Point R3 19,944

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Source: Fx Street

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