USD/MXN sharp rebound towards 19.80 from five-month lows

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  • Emerging market currencies affected after Fed meeting.
  • Outlook for rates in the US gives support to the dollar.
  • USD/MXN finds support at 19.50.

USD/MXN is rising on Thursday after trading at the lowest level since early June. The sharp change in trend could herald more upside ahead, especially if the pair breaks above 19.80.

In a day of high volatility on Wednesday, the USD/MXN fell as low as 19.50, in the aftermath of the Fed’s decision. The US central bank suggested it could slow the pace of rate hikes which bottomed out the dollar.

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At the press conference, the president of the Fed, Jerome Powell, affirmed that possibly interest rates are going to rise more than previously estimated. This made bonds, stocks and the dollar change direction, boosting USD/MXN.

The USD/MXN rebound was more relevant as it came from a medium-term key support levelwhich is the 19.50 area and was the target after breaking below 19.70.

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Dollar gains are widespread and the Mexican peso outperformed most other emerging currencies on Thursday. If the bad moment in Wall Street persists and the rise in US bond yields, expect upward pressure on the USD/MXN.

Should the price break above 19.80, a test of the next resistance at 19.95 would be expected. While if it manages to return below 19.70, the Mexican peso would be strengthened, favoring a consolidation between 19.50 and 19.70.

Technical levels

USD/MXN

Panorama
Last Price Today 19,749
Today’s Daily Change 0.0759
Today’s Daily Change % 0.39
Today’s Daily Opening 19.6731
Trends
20 Daily SMA 19.9485
50 Daily SMA 20.0129
100 Daily SMA 20.1582
200 Daily SMA 20.2015
levels
Previous Daily High 19.7622
Previous Daily Minimum 19.5063
Previous Maximum Weekly 20.0384
Previous Weekly Minimum 19,785
Monthly Prior Maximum 20,177
Previous Monthly Minimum 19,785
Daily Fibonacci 38.2% 19.6041
Daily Fibonacci 61.8% 19.6645
Daily Pivot Point S1 19.5322
Daily Pivot Point S2 19.3913
Daily Pivot Point S3 19.2762
Daily Pivot Point R1 19.7881
Daily Pivot Point R2 19.9032
Daily Pivot Point R3 20.0441

Source: Fx Street

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