USD / MXN jumps to two and a half month highs, above 20.50

• The dollar shoots up and accelerates higher after the Federal Reserve meeting.
• The Mexican peso, among the worst of the week.

The USD / MXN is rising for the fifth day in a row and after a spike on Wednesday. The price recently reached 20.61, the highest level since the end of March, then fell slightly and is trading in the 20.50 area.

All for the dollar

The key factor behind the advance in a few days of the USD / MXN from 19.70 to 20.60 is the strength of the dollar, although we must also add technical factors of the cross and some weakness of the Mexican peso. The latter is one of those that have fallen the most in the world in recent days, being one of the most affected by the change in the market.

The Federal Reserve’s signal that interest rates could rise earlier than previously expected triggered a strong rise in the dollar in the market and a fall in the stock markets, as well as a great advance in the yields of Treasury bonds. All of these are negative factors for the Mexican peso and emerging market currencies in general.

On Thursday the market will continue to analyze what the Fed and it will be seen how far the dollar can go with this impulse, which for now, has gone on to have a bullish outlook. US unemployment benefit claims data to be released.

USD / MXN if it returns to the alkyst

Regarding the technical landscape, USD / MXN is now bullish. The break at 20.30 further propped up the rises and now the price is testing level above the 200-wheel moving average above 20.40. Around 20.60 you can find a resistance to take into account, so a close above it, would leave the way for more rises.

Just a return below 20.20, would ease upside pressures. The expectation of a consolidation ahead lies in the significant and rapid advance of the USD / MXN, which could lead to a pause. But at the moment there are no signs of it and the dollar remains strong on all fronts.

Technical levels