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USD/MXN hits one-month highs and approaches 21.00

  • Mexican peso falls sharply against the dollar on Friday.
  • The situation in Ukraine worsens and hits the markets.
  • USD/MXN heading for the highest weekly close since December.

The USD/MXN accelerated the upward pace in the last hours and climbed to 20.85, reaching the highest level in a month. Should the week end at these levels, it would be the highest weekly close so far this year.

Around 20.85/90, the USD/MXN has a resistance that, if given, would pave the way for a test at 21.00. Bullish tone remains firm. The 20.75 level may now appear as the first support, followed by 20.60 and then 20.50. The Mexican peso needs to avoid breaking 20.85/90, which is the level that stopped the advance in late January.

On Friday, the Mexican peso is among the worst performers so far this day, and in the week it is the one that loses the most ground among those in Latin America. The USD/MXN accumulates an advance of 2.51% in the week. The emerging currencies are being affected by the cautious climate in the global financial markets, although at the same time several are showing resistance favored by the rise in the price of raw materials.

The key data for these hours will be the US employment report. A increase in non-farm payrolls of 400,000 and that the unemployment rate goes from 4% to 3.9%. Next week it will be the turn of the February inflation data, which may even be more important than the employment data in the current context. In Mexico, the inflation data for February will be known on Wednesday.

Technical levels

Source: Fx Street

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