- The recovery of the Mexican peso against the US dollar loses momentum after reaching three-day highs.
- The dollar records mixed results amid a deterioration in market sentiment.
- Key USD/MXN supports are seen at 20.85 and 20.75.
The USD/MXN is rising on Thursday after falling sharply on Wednesday from the highest level in three months near 21.50. The correction found support at 20.85. At time of writing, the pair hovers around the 21.00 level.
After the release of US economic data, USD/MXN hit a high of 21.06 on Thursday and then pulled back. The move back below 21.00 continued even amid falling stock prices and despite rising US yields on Wall Street, Dow Jones down 1.38% and Nasdaq down 2.27 %. Crude oil prices rise, but far from highs.
The war in Ukraine remains the key factor. Looking at economic data, US inflation reached 7.9% (annual), the highest level since 1982. Next week, the Federal Reserve will likely raise interest rates.
The trend in USD/MXN is bullish. A consolidation above 21.10 would expose the next resistance at 21.30. A drop below 20.80 should ease the upside pressure, while below 20.70 (horizontal support and 20-day SMA) the bias should change to neutral.
Technical levels
Source: Fx Street
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