USD/MXN drops toward 22.25 as the US dollar slides
|- Mexican peso rises versus the US dollar but retreats versus EM currencies.
- USD/MXN heads for lowest close in a month, still above 22.20.
The USD/MXN has continuously fallen over the last 24 hours. It is trading at 22.27, the lowest level in almost a week and near the July bottom. A weaker US dollar across the board pushed the cross to the downside.
An improvement in risk appetite boosted the demand for emerging and commodity currencies and weighed on the greenback. The agreement at the European Union of a recovery fund and optimism about a COVID-19 vaccine is behind the risk-on mode.
Among emerging markets, the Mexican peso is not outperforming. The Brazilian real is the biggest gainer with USD/BRL falling 2.80. The Australian dollar is the best major on Tuesday, gaining 1.70%.
Levels to watch
The USD/MXN is trading near the 22.20/25 resistance band. If it drops below, it would target 22.00/05. Under 22.00, the next support is seen at 21.90 that protects 21.55.
At the moment, USD/MXN is facing increasing bearish pressure, but if during the next sessions it manages to hold above 22.20, it would alleviate the tone, favouring a rebound. Resistance is seen at 22.60 and then at 22.75. A daily close above the last one would clear the way to more gains.
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.