- Mexican peso loses strength in the market and is one of the ones that fell the most on Wednesday.
- USD / MXN rises to test 20.50, after finding support at 20.00.
The USD / MXN is trading just below 20.50, in the zone of the highs of the last three days, which is why if it breaks the mentioned zone, an upward extension would be expected. The recovery of the dollar together with a decline in the Mexican peso, eased the downward pressure on the pair.
The Mexican peso on Wednesday is among the weakest currencies on the board. This despite the fact that the stock markets in the world continue to be driven by the positive impact of the announcement of the vaccine for the coronavirus. Oil is also still uphill. But this is not enough to get the MXN back up.
In Mexico It was known that industrial production remained unchanged in September with respect to the previous month (6.2% below a year ago), showing signs of a slowdown in the recovery. On Thursday the Bank of Mexico will announce its monetary policy decision. The market consensus points to a reduction of 25 basis points. The rise in inflation in recent months reduced the possibility of more aggressive declines.
Technical overview
The USD / MXN in the very short term is bullish, and a break above 20.50 should propel it further with a possible immediate target at 20.65. The next resistance is at 20.85 / 90.
If it continues below 20.50, then the weakness would be expected to return. Short-term support to look at is 20.20 / 25, which if given up would point to a test at 20.00.
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Credits: Forex Street
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