USD/MXN: Mexican peso having worst day in months; rally over?
|The Mexican peso is falling more than 1% against the US dollar on Wednesday, and together with the Brazilian real are among the worst performers in the currency market.
USD/MXN reached yesterday a fresh 5-month low at 18.45 but it was rejected from under 18.50 and bounce to the upside, ending the day far from the lows. Today the pair has been moving with a bullish bias and during the last four hours, it accelerated.
After breaking above 18.65, the pair gained momentum. Recently it peaked at 18.84, the highest level since April 6.
Above key levels
From a technical perspective, the rally of the US dollar was reinforced after breaking a strong resistance at 18.65 and also a downtrend line. The rally pushed the price significantly above the 20-day moving average for the first time sine January.
If today’s levels are confirmed it could signal that yesterday’s low is a short-term bottom and an extension of the bullish correction or a consolidation, could follow. The slide of the Mexican peso against the dollar could implicate the end of the MXN uptrend that as been in place since late January, when it started to decline from record highs located above 22.00.
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