USD/MXN hits 1-month highs at 19.36 and retreats
|- The Turkish crisis continues to hit Emerging Markets, boosting the demand for the US dollar in Latin American.
- US Dollar up 9.15% vs TRY, 2.80% vs Argentine peso, 2.55% vs South African rand and 1.25 vs Brazilian real.
- USD/MXN is up for the fourth consecutive day and is consolidation above 19.00.
The USD/MXN pair is headed toward the highest daily close since July 2, after rising during four days in-a-row. From last week bottom, the pair climbed 4.70%, amid a decline across Emerging Market assets. The crisis in Turkey boosted the US dollar in Latin America.
The decline of the USD/MXN that started in mid-June ended abruptly last week. It bottomed at 18.39 and then reversed sharply. It accelerated the upside on Thursday when the Turkish crisis escalated. Today it opened with a bullish gap above 19.00 and peaked at 19.36, the highest intraday level in a month.
As of writing it was trading at 19.20, up 1.65% for the day, far from the top but still holding a bullish tone. So far, the area around 19.30 capped the upside but upside pressures are likely to remain in place as long as the crisis in Turkey continues to trigger concerns across Emerging Market.
Technical perspective
“USD/MXN’s slide from its June peak at 20.9612 halted at 18.4052, within the 18.4487/18.3090 support area (November 2017 as well as this year’s January and February lows), before a swift trend reversal took place. Confirmation of such a bullish reversal would be a rise and daily chart close above the mid-July high at 19.1681”, wrote analysts at TDS.
On the flip side, according to them, only a daily close below the support of the February low at 18.3090, would put the 17.94 area in the frame. “Further support comes in along the 2016-18 support line at 17.7927 and at the 17.4465 July 2017 low.”
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