USD / MXN rises for the second day although it remains close to 21.00 and with a downward bias

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  • Unclear market outlook weighs on emerging currencies.
  • USD / MXN advances, but technically bearish bias predominates although it needs to break 21.10.

USD / MXN is rising for the second day in a row but still remains close to recent lows and bearish tone intact. The fall in stocks on Wall Street detracted from the Mexican peso but the decline has been moderate for now.

The Emerging currencies are showing mixed results on Tuesday with little change so far this week. The dollar is rising against most major currencies but declining against the euro and the Swiss franc. In the last hours it has gained momentum against those linked to commodities and this could anticipate an advance against emerging companies, including the Mexican peso.

Part of what happens will depend on the behavior of stocks on Wall Street. In the US, the focus is on the elections to take place in two weeks and in negotiations for more stimulus. There could be news about this. Nancy Pelosi, leader of the Democrats in the House of Representatives, said that today is the last day to reach an agreement so that the bill can be approved before the elections.

The general investor climate continues to be affected by these negotiations and also by the unclear global economic outlook. The good signs from China collide with the possibility of further restrictions on movement in Europe. In between, the US slowdown faces internal risks such as political ones.

Technical overview

He USD / MXN maintains the bearish technical bias although it needs to firmly break 21.10, which is the key support at the moment to go to test 21.00. Just below the September low at 20.83 will appear on the scene.

On the upside, a confirmation above 21.38 would ease the downward pressure, although just a close above 21.70 (topping key daytime moving averages) would signal a possible temporary floor in USD / MXN.

Technical levels

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Credits: Forex Street

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