- Mexican peso cuts bullish streak, but remains near highs in months.
- USD / MXN clings to weekly losses, still below 20.00.
USD / MXN is rising modestly on Friday, trading around 19.85, snapping a three-day streak of declines. The bias remains downward, in part due to the weakness of the dollar and the rise in equity markets.
He Dollar index (DXY) remains in two-year lows, below 90.00. The greenback fails to activate a sustainable recovery at the moment. This is a key factor behind the USD / MXN decline.
Another event is the rise in the equity markets. Optimism in global markets favors demand for riskier assets and among them, emerging market currencies.
Thursday the Bank of Mexico it kept the benchmark interest rate unchanged as was mostly expected. The rate will start in 2021 at 4.25%. If inflation continues to decline, and the exchange rate remains stable, Banxico could analyze further cuts more seriously.
Technical overview
He USD / MXN maintains a firm negative trend, especially when staying below 20.00. A daily close below 19.75 would enable a bearish extension, with the next strong support 19.45 / 50.
The rise on Friday is due to a correction and a pause. A rally above 19.95 / 20.00, which is a horizontal level and where the 20-day moving average is passing, would point to a bullish extension. The trend will remain firm as long as the price remains below an eight-month bearish line that is passing through the 21.15 zone.
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