- The dollar continues to recover ground on all fronts.
- USD/MXN moves away from lows in months.
USD/MXN is trading near daily highs at 19.94, bouncing back after finding support in the 19.80 area. The rebound comes after several days with consecutive falls, which reached a minimum in two months.
The current advance has more to go according to the technical indicators on the daily chart, or at least they point to a stabilization in the short term. Next resistance is seen at 20.00/05 and then the 200 day moving average at 20.15.
The break of 19.80 would put pressure on the USD/MXN opening the doors for a fall to 19.70/72, where the next barrier is.
Dollar gains momentum again
The dollar it is rising on Tuesday, although it has lost momentum in recent hours. Despite this, the USD/MXN remains firm near the highs of the day. The dollar rises remain supported by a rise in Treasury bond yields. The 10-year rate is at daily highs near 2.85% and the 30-year rate at 3.14%.
In the US, a sharp drop in housing starts for July and a higher-than-expected rise in July industrial production of 0.6% were reported on Tuesday. On Wednesday the minutes of the last meeting of the Federal Reserve will be published.
In Mexico, the economic data for the week will be June retail sales on Friday. Next it will be the turn of mid-August inflation on Wednesday and June activity on Thursday. These last two reports will serve the Bank of Mexico to see the next steps. Last week Banxico raised the benchmark interest rate by 75 basis points to record levels.
Technical levels
Source: Fx Street
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