- The dollar remains firm in the market supported by the rise in Treasury bond yields.
- On Wednesday the decision of the Federal Reserve.
- USD/MXN consolidating with resistance at 20.45.
USD/MXN is slightly higher on Monday as the dollar advances in the market. The pair is trading around 20.40, in the same area as in recent days. The tone of consolidation remains despite the weakness of most emerging market currencies.
The Mexican peso is one of the ones that falls the least among the most traded. The news is that the strength of the dollar continues in a negative context for currencies associated with higher risk. On the one hand, there is the rise in Treasury bond yields, which has accelerated. The 30-year rate is above 3.04% and the 10-year rate points to 3%. This occurs days after knowing the decision of the Federal Reserve and supports the greenback.
The other negative factor for currencies like the MXN is risk aversion. Wall Street had a strong fall on Friday and at the start of Monday it is extending the negative tone. The Dow Jones loses 0.25% and the Nasdaq 0.09%. Fears about the slowdown in the global economy, plus the impact of the monetary adjustment influence the mood of the markets.
Technically, USD/MXN remains capped to the upside by the 200-day moving average and the 20.45/50 zone. A confirmation of this level would leave the USD/MXN open for further increases. The next resistance is at 20.70. In case of not being able to break and confirm below 20.30, then the Mexican peso would alleviate the pressure and could take the cross to 20.11, where the 20-day average is.
Technical levels
Source: Fx Street
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