- The dollar rises across the board on risk aversion.
- US yields advance strongly after inflation data.
- USD/MXN is headed for the biggest weekly gain since March.
The USD/MXN is having the best day in weeks, fueled by a rally in the US dollar across the board. The pair went from below 19.70 to 19.96, reaching the highest level since May 19.
Following the US inflation data, Wall Street resumed its decline and US bond yields continued to rise. The University of Michigan consumer confidence report contributed to risk aversion. The Dow Jones falls more than 2%, and the Nasdaq plunges 3.40%.
bullish outlook
USD/MXN broke above the 20-day simple moving average again. The daily chart shows bullish signs with the RSI moving higher, away from overbought levels, and Momentum above the 100 level.
If the pair sustains above the 19.90 resistance area, a test of the 20.00 level seems likely. The bullish tone will hold as long as it is above 19.70. Below the mentioned level, the Mexican peso will regain strength, exposing the 19.50 zone.
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Technical levels
Source: Fx Street
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