USD/MXN rejected from above 19.50, drops to test weekly lows near 19.30
|- Mexican peso jumps from 6-day lows to test September highs.
- Dollar reverses across the board as crude oil prices collapse more than 5%.
The USD/MXN pair reversed sharply during the American session and dropped from above 19.50 to 19.34 (last week low). As of writing, it is hovering near daily lows, with a strong negative momentum.
After a spike to 19.54, USD/MXN started to decline at the same momentum the US Dollar weakened across the board and when crude oil prices reversed sharply.
WTI crude is falling more than 5%, after Saudi Arabia reported the restoration of most the oil output is lost after the weekend attacks. Equity prices in Wall Street are mixed, amid the reversal in crude oil prices, rising geopolitical tensions and ahead of the Federal Reserve decision.
US data released today showed industrial production rose 0.6% in August, a reading above expectations (0.2%) and it represents a rebound after the 0.1% slide of July. The NAHB Housing Market Index sentiment climbed in September to the highest level this year. Economic numbers did not help the greenback that was probably also affected by a modest decline in US yields.
Technical Outlook
Another reversal in USD/MXN but now in favor of the Mexican Peso. Price was rejected from above a key resistance level around 19.50 and retreat to test the 19.30/35 support. A close below the last one could clear the way to more losses while above 19.60 it could signal the rally of MXN is over.
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