- The dollar is modestly up against emerging market currencies.
- USD/MXN maintains predominant downside risks.
- A week begins that can be very volatile.
USD/MXN rises modestly on Monday, at the start of a key week for financial markets and a decline in global stock markets. The pair trades in the 18.75/50 area, moving sideways.
The dollar presents mixed results, although it rises against most of the emerging markets in a moderate way. European stocks and Wall Street futures are falling on Monday. At the same time, sovereign bond yields are rising, particularly in Europe after inflation data from Spain and ahead of various central bank decisions.
Wednesday the Federal Reserve will announce its decision, on Thursday the European Central Bank and the Bank of England will. Next week it will be the turn of the Bank of Mexico. All central banks are expected to raise benchmark interest rates. The unknown is in the message and when the peak in terms of interest rate rises will occur.
The USD/MXN outlook remains bearish on long-term charts. In the short term, the bias is also in favor of the Mexican peso, although for the moment the 18.75 area continues to be a considerable support. A confirmation below will enable further downsides and a test of the next support at 18.65. Then it appears on the radar 18.50/55.
In case the USD/MXN manages to return and affirm itself above 18.80, it would relieve the bearish pressure, while a firmer return above 18.90 would signal that an extension of the bullish correction above 19.00 is possible.
technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
