USD/MXN drops back to 20.00 as the Dow Jones rises above 30,000
|- US stocks rise sharply, Dow Jones at record highs above 30,000.
- The Mexican peso is the top performer among emerging market currencies.
The USD/MXN is falling on Tuesday after a short-lived rebound on Monday. It is about to test the 20.00 area again. On Monday it bottomed at 19.97, the lowest level since March before rebounding toward 20.20. It remains under pressure on the back of risk appetite.
The Dow Jones just climbed above 30,000 for the first time; it is up by 1.60% boosted by several factors: developments around the COVID-19 vaccine, the begin of the official transition in the US from Trump’s administration to Biden and US economic data.
In Mexico, bond yields dropped over the last weeks to the lowest since March, and inflation data released on Tuesday showed a slowdown during the first half of November. All positive news that contributes to boosting the Mexican peso.
From a technical perspective, USD/MXN remains bearish and is testing the psychological 20.00 area. A break lower should lead to more losses targeting 19.75 and then 19.55.
The bearish bias in USD/MXN will likely hold as long as it remains under the 21.45/55 area (downtrend line and horizontal resistance). The immediate resistance is seen at 20.20, followed by 20.44 and 20.68.
Technical levels
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