USD / MXN finds support at 20.05 and bounces, maintaining the bullish bias

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  • Emerging market currencies remain under pressure as equity markets fall.
  • Mexican peso does not escape the negative tone and is among the weakest in the region.
  • USD / MXN affirms above 20.00 and sets its sights on 20.20.

The USD / MXN is trading in the 20.12 zone, after having bounced off 20.05. The price reaffirmed the bullish tone, quickly erasing the daily losses and continues with its sights on 20.20 where it is the level to overcome. Fears in global markets continue to play against emerging market currencies.

The situation with Chinese real estate giant Evergrande triggered a number of fears and caused a slide across global stock markets. This put downward pressure on emerging market currencies, including the Mexican peso. The latter has been the most affected among those in Latin America in the last week.

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The weakness of the peso may have been enhanced by technical factors and by being more exposed than the rest of the countries to global capital flows. On the technical side, the USD / MXN gained momentum after breaking a multi-day range and rising above 20.00.

The focus of traders remains on the mood of the markets, more sensitive after the falls in stocks on Monday. Also on the radar is the meeting of the Federal Reserve which starts today. On Wednesday the decision and the statement will be known, which would be expected to have a high impact. On MexicoThe inflation data for mid-September will be released on Thursday and the July retail sales report on Friday.

Technical levels

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