- The Mexican peso is holding on to recent gains and continues to press above relevant levels.
- USD/MXN had the lowest daily close since the end of June.
- Rise in commodities continues to help emerging and commodity-linked currencies.
USD/MXN is trading just below 19.80, bearish tone intact. The Mexican peso hit highs since June of last year before retreating.
The rise in commodities, together with the advance on Tuesday in the equity markets, is giving important support to the Mexican peso. If this scenario continues, the currency could continue to appreciate. Conversely, a deterioration in general market sentiment could deal a blow to bullish aspirations.
Technically, andl USD/MXN remains bearish. Support is forming in the 19.75 area. Although until 19.60, where the minimum of June of last year is, there are several levels. A daily close below 19.70 would be a sign of continued bearishness. From a broader view, key support looms at the 19.50/55 area, which should contain the downside if hit in the coming sessions.
Several technical indicators show extreme levels of oversold in the USD/MXN but there are no signs of a rebound yet. Some consolidation ahead around 19.80 would be expected. A return above 20.15 would relieve downward pressure. While already above 20.30, the dollar would be positioned for more rises.
Technical levels
Source: Fx Street
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