- Mexican peso among the best performing currencies on Monday.
- USD/MXN could have the lowest daily close in a month.
USD/MXN is falling on Monday and is approaching last week’s lows. The cross operates in the low zone around 20.40, with a bearish tone. Despite the falls in the equity markets, the Mexican currency remains firm against the dollar, being among the best performers.
Looking towards 20.35 and the 200 moving average
In the European session USD/MXN found resistance at 20.55 and changed direction retaking the lows. The cross is approaching 20.30/35m, which is relevant support, containing horizontal levels and also the 200 day moving average. A close below will suggest more downside ahead. In the opposite direction, above 20.55 the bearish tone should ease, while just above 20.70 the dollar would be positioned for further gains.
The Fortaleza that the Mexican peso is showing is reflected in the fact that it has achieved a good performance despite the falls in the equity markets. Fears of a Russian invasion of Ukraine added to last week’s Federal Reserve monetary tightening.
The above remain significant risks for emerging market currencies. If there are more declines in the stock markets, and if these are accompanied by a certain stability in the Treasury bond market, it will be more difficult for the Mexican peso to keep the USD/MXN on the brakes or down.
Technical levels
Source: Fx Street
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