USD/MXN jumps to one-month highs above 23.00
|- BRL and MXN are among the worst performers on Friday.
- Risk aversion weighs on emerging market currencies, US dollar soars.
The USD/MXN accelerated to the upside during the American session and jumped to 23.07, reaching the highest level since May 22. A sharp slide in Wall Street weakened emerging-market assets.
As of writing, USD/MXN trades at 22.97, holding above 22.80 and on its way to the highest close in a month, favoring further gains ahead, particularly if climbs above 23.00.
Also, fundamental factors are boosting the pair. The Dow Jones is falling 2.20% or 560 points while the Nasdaq drops 1.65%. Analysts offer many reasons for the retreat, from overvalued equity prices, to profit-taking, the spread of coronavirus in the US, and risks emerging from fresh US-China tensions related to Hong Kong. The Brazilian real and the Mexican peso are the biggest losers on Friday among the most traded currencies.
US data released on Friday included a rebound in personal spending, a decline in income, and a lower than expected reading of consumer confidence indicators. Market participants ignored those numbers.
USD/MXN Testing 23.00
The USD/MXN is about to post the third weekly gain in a row and is testing the 23.00 area. The 22.80 is critical, and a daily close above would point to further gains. The next resistance is seen at 23.20, followed by 23.50/55.
On the flip side, support levels for USD/MXN emerge at 22.60 and then the essential 22.25, a horizontal level, and also the 20-day moving average.
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