USD/MXN breaks critical resistance, rises above 19.30 to highest in four weeks
|- Mexican peso accelerates losses versus the greenback, as technicals add to the negative tone.
- Former Bolivian President Morales lands in Mexico.
On a bad day for Latin American currencies, the Mexican peso was having a decent performance but all changed over the last two hours. The USD/MXN pair broke above 19.20/25, a critical resistance and jumped to 19.33, reaching the highest level in almost a month.
The pair accelerated to the upside after being able to remain relatively steady amid a rally of the US Dollar against Latin American currencies. Social and political turmoils in the region weight on market sentiment.
In a Mexican plane, former Bolivian President Evo Morales landed in Mexico that offered asylum. While Mexican President Lopez Obrador took a position supporting Morales, US President Donald Trump considered the resignation as a significant moment for democracy in the Western Hemisphere. The difference between the presidents represents a new risk in their relationship.
More gains ahead?
As long as USD/MXN holds above 19.25 more gains seem likely. The momentum favors the upside after breaking a four-week range, rebounding from a long-term support level. The bullish breakout clears the way toward 19.45/50, the next strong resistance. At current prices, the outlook favors the upside. A retreat back under 19.30 would ease the pressure, while under 19.20 a move back to the previous range 19.00/20 seems likely.
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