- Emerging market currencies rise on gains in stocks.
- USD/MXN finds support at 20.40.
- Fed meeting will be key for the Mexican peso.
USD/MXN extended the bearish run on Friday and reached 20.39, the lowest level in almost a week. It then bounced higher to the 20.45 area. The cross moves with a negative bias in the very short term, although key breaks cannot be confirmed yet.
At the start of the week, emerging market currencies receive further relief from a rally in equity markets. In the case of the USD/MXN, the pair is operating below the 20-day average of 20.47, but it has not yet been confirmed. A daily close below 20.45 would give the peso strength exposing the next support at 20.30. If held above, the cross could retest critical resistance at 20.70whose break would trigger more raises.
The meeting of the Federal Reserve. On Wednesday the decision will be known, which is expected to be a rise of 75 basis points. The tone of the statement and the guidelines are expected to have a significant impact, particularly on the Mexican peso.
In Mexico it was known on Monday that the index of economic activity registered a contraction of 0.2% in May; On the positive side, the year-on-year comparison registered a rise of 2.10%, higher than the expected 1.70%.
Technical levels
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
