- Mexican peso starts the week positive due to better weather in the markets.
- Dollar loses strength after Friday’s rally, in the context of rising stocks and bonds.
- USD/MXN tests levels below 20.30, ahead of the 200-day moving average.
USD/MXN is falling on Monday and recently fell as low as 20.25, the lowest level in a week. The decrease occurs before a rise in the stock markets and in raw materials.
Emerging market currencies are rising against the dollar. A supportive factor is the rise in stock markets. On Wall Street, the Dow Jones rises 0.65% and the Nasdaq 0.99%. At the same time Treasury yields are falling, erasing part of Friday’s rally.
The DUS jobs data on Friday pushed up the dollar. That strength has evaporated for the time being. This week the key US figure will be Wednesday’s inflation figure.
In Mexico this week will be loaded. On Tuesday the inflation data will be published, which could show an annual rise of more than 8%. Thursday will be the meeting of the Bank of Mexico. The expectation is for another rise in the interest rate, which would be 75 basic points, to 8.50%.
Technically the USD/MXN is again testing the 20.25/30 support zone. If confirmed here, a drop to 20.15 would be expected, where the 200-day moving average is expected.
For the pair to recover its bullish momentum, the USD/MXN has to rise and assert itself above 20.50, an area that includes horizontal resistance and also the 20-day moving average.
Technical levels
Source: Fx Street
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