- Mexican peso loses strength against the dollar due to deterioration in the mood of the markets.
- USD / MXN on track to cut five-week streak with declines.
USD / MXN is trading around 12.20, in positive territory compared to a week ago. In this way, it is cutting five weeks in a row with increases in the Mexican peso. The deterioration in the mood of the markets weakened the peso.
Emerging market currencies are retreating against the dollar on Friday, although they have cut losses in recent hours. The main Wall Street indices moved away from the lows, which put a limit to the rise of the USD / MXN.
The no-deal Brexit and the increase in coronavirus cases are factors that have favored the correction from highs in the stock markets this week. If the declines continue, we would expect a bearish bias on emerging market currencies to continue.
Technical outlook for the Mexican peso loses strength
Friday’s rise in the USD / MXN, along with the return above 20.00 and confirmation above 20.00, have pushed the Mexican peso into momentum. The price rebound is from the 200-week moving average, which is passing through 19.65.
The dominant trend remains bearishbut the moment of it has faded. For now, the USD / MXN rally looks like a normal correction. Around 20.20 / 25 is the first strong resistance. If it exceeds that level, the next one is at 20.80. The bearish bias will remain unchanged as long as it remains below 21.30, which is where a bearish line is passing.
Technical levels
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