- Mexican peso recovers ground after Tuesday’s fall.
- USD/MXN remains sideways, unable to break 20.20.
- The dollar continues to be supported by a cautious climate in the markets.
USD/MXN is trading just below 20.10 on Wednesday, having reached a daily high of 20.18. The setback occurs due to a rebound in shares on Wall Street, but the climate of caution still prevails, which limits the Mexican peso.
USD/MXN gains face a major resistance between 20.17, where the 100 day moving average is, and 20.25. A close above this latest level would clear the way for further rally with a possible target around 20.45.
For days the pair has been moving laterally, without a clear direction. Initial support is at 19.90, followed by the range floor at 19.80. The break of this last level would first expose 19.70 and then 19.55 follows.
The USD/MXN sideways tone remains despite the declines in equity markets and the rise in Treasury bond yields. Also despite the dollar strength. The Dollar Index (DXY) is at a decade high. These days the greenback rises faster and firmer against the currencies of developed countries than against emerging ones.
Technical levels
Source: Fx Street
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