USD/MXN hits 1-month lows as Mexican peso soars
|- Mexican peso gains more than 2% against the US dollar, biggest gainer of the day.
- USD/MXN slides to test strong support area around 19.50.
The combinations of a stronger Mexican peso after Sunday’s election and a recovery in Emerging Markets that weakened the greenback, pushed USD/MXN sharply to the downside.
The pair lost more than 2% and bottomed during the American session at 19.50, the lowest level since late May. After a pause in the correction, USD/MXN resumed the decline on Tuesday. From June highs, the pair lost 8%. The pair approached 21.00 last month before turning to the downside.
The demand for the Mexican peso gained momentum following a conversation between US President Trump and Mexican President-elect López Obrador (AMLO). They talk about border security and trade. Also the peso received an impulse from AMLO’s comments about its economic policy.
USD/MXN Levels to watch
The current short-term tone is clearly bearish and it is about to test the 19.50 zone. Below that level, the next strong support is the 19.25/30 zone. Resistance levels might now be located at 19.70, 20.05 and 20.25 (20-day moving average).
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