- Mexican peso gets a break from dollar correction.
- USD/MXN continues with a dominant upward trend, sideways in the very short term.
- Support at 20.65/70, resistance remains at 20.90.
The USD/MXN is falling on Friday due to a weakening of the dollar in general and a rise in the markets in general. The better mood is giving support to emerging market currencies that get a breather.
In the case of the Mexican peso, on Thursday it had already given positive signs by closing below 20.90. In this way, the USD/MXN has already accumulated four days of sideways trading around 20.80.
On Thursday, USD/MXN traded above 21.00 for the first time since mid-March, but could not be confirmed above and backed off. The short-term bias and trend remain clearly bullish. Just after asserting itself above 20.90, the doors to more rises would open, with the next strong resistance being in the area of ​​21.25.
In the opposite direction, immediate support looms between 20.65/70. Should it consolidate below, a further downward correction would be expected, with a possible target of 20.45.
a day of relief
At the moment, the dollar is pulling back and markets are rising, offering some relief for emerging currencies. In any case, the underlying conditions continue to favor the greenback.
Economic data released on Friday from the US included a larger-than-expected rise in June retail sales and a jump in July’s Manufacturing Empire (partially offset by a decline in June’s industrial production), which which reinforced the chances of a 100 basis point hike by the Federal Reserve.
Higher interest rates in the US is a negative factor for emerging markets. To the above, we can add a climate of pessimism in the stock markets and a bearish outlook regarding the price of raw materials, complicating the scenario for these currencies.
Technical levels
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
