- The Mexican peso is among the worst performers on Wednesday.
- USD/MXN reverses sharply towards the 20-day SMA.
- Volatility will remain elevated amid market events and current price levels.
The USD/MXN rose sharply on Wednesday, posting the biggest daily gain in months after posting the lowest daily close since February 2020 on Tuesday. The dollar strengthens ahead of Federal Reserve Chairman Jerome Powell’s speech, while the Mexican peso is the worst among the most traded currencies in the world.
On Tuesday, the USD/MXN bottomed at 19.03 and then started to rise. After a correction during the Asian session, the pair resumed its gains at an even faster pace. It reached a maximum at 19.45 and keeps the bullish tone intact.
The sharp reversal sent the dollar to the 20-Day Simple Moving Average of 19.43. A consolidation above would likely open the door for a test of the next resistance zone at 19.60. Although at 19.52 intermediate resistance is seen.
The technical outlook has deteriorated significantly for the Mexican peso. Technical indicators such as Momentum and RSI are headed north for now, favoring further gains. A pullback below 19.25/30 could change the picture exposing the 19.00/05 support zone again.
USDMXN daily chart
Source: Fx Street
I am a writer for World Stock Market. I have been working in finance for over 7-8 years, and I have experience with a variety of financial instruments. My work has taken me to Japan, China, Europe, and the United States. I speak Japanese and Chinese fluently.
