USD/MXN breaks above 20.50, moves further away from 20.00
|- Mexican peso loses momentum across the board on Wednesday.
- USD/MXN accelerates after breaking 20.50, looks at 20.65.
The USD/MXN resumed the rebound from the 20.00 area, and it climbed to 20.61, reaching the highest level since Friday. It gained momentum after breaking 20.50, and it is holding onto daily gains, having the best day in two weeks.
The Mexican peso is among the worst performers across the board on Wednesday, correcting lower after rising sharply over the previous days. Equity price in Wall Street area mixed. The MXN lost strength as the rally in equity markets eased.
Also, some domestic factors could have been affecting the Mexican peso. The latest data continues to point to a deceleration in economic activity, and inflation in October climbed to the highest level since mid-2019. On Thursday, the Bank of Mexico will announce its decision on monetary policy. A rate cut is expected, but the room for maneuver has been reduced amid rising inflation. On the other side, the appreciation of the Mexican peso over the last two months offers a positive argument for those board members that would like to cut rates.
From a technical perspective, the USD/MXN still holds a dominant bearish bias. Although in the very short-term, the US dollar looks stronger. If it remains above 20.50, it will likely test the next resistance at 20.65; above the next one is seen at 20.85. On the flip side, the 20.25 is the immediate support; a break lower would expose the 20.00 zone.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.