- The dollar rises strongly in the market, driven by Treasury bond yields.
- USD/MXN bounces off critical support, targets 20-day moving average.
ANDhe USD/MXN is rising significantly on Thursday, sharply cutting a five-day losing streak. The price went from testing the floor of 2022, to jumping to highs in three days.
In the Asian session, USD/MXN fell to 19.72, matching the 2022 low, but then started to climb. The rises accelerated in the last hours. Recently the pair reached 20.01, the maximum in three days.
After the start of the American session, the bullish tone remains firm supported by the general strength of the dollar. The greenback is rising on all fronts, trading at the highest since 2020 against the euro.
Treasury bond yields cut calm hours with a big rise. The 30-year tranche jumped to 2.89%, a new high in years; the 10-year rate is at 2.79%, high in two days, moving away from the low in a week hours ago at 2.64%. DXY is at fresh highs above 100.50.
The US data released (jobless claims and retail sales) came as no surprise.
Aiming for the 20-day average
USD/MXN rallies from critical support have potential to extend in the short term. To the upside, next resistance is seen at the 20-day moving average at 20.03. If confirmed above, the next level is at 20.20. The break of the latter along with a confirmation above 20.25, would enable more rises for the dollar.
If the USD/MXN cannot hold above 20.00, the dollar will lose momentum. Chances of a break below 19.70 have lost steam in the last few hours.
Technical levels
Source: Fx Street
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