- The Mexican peso validates Friday’s rises against the dollar.
- USD/MXN with support at 19.90m followed by 19.80.
USD/MXN remains below 20.00, giving signs of strength for the Mexican peso. The pair started off at weekly lows around 19.90, before bouncing back toat 20.02, but quickly pulled back towards 19.95. The short-term bias continues to the downside.
USD/MXN support is seen at 19.90, followed by 19.80 and then 19.73. The bearish tone is expected to remain intact as long as the pair continues below 20.17. The break of 20.25, with a confirmation would leave the dollar ready to extend the rises.
Firm dollar, but not against MXN
The dollar hit a decade high against major currencies, but emerging market currencies are holding up somewhat, even as financial markets remain cautious. In Europe, the main markets lose more than 1%. Wall Street does not operate on Monday because it is a US holiday.
Non-trading in the US is expected to keep volume limited on Monday, which may contribute to more limited rallies in USD/MXN.
The key data of the week in Mexico will be known on Thursday with the inflation figures for August. The annual rate would reach 8.66%, well above the objective of Bank of Mexicowhich has its next meeting on September 29 and is expected to raise the rate by 75 basis points to 9.25%.
Technical levels
Source: Fx Street
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