Chart of the day: EEM vs USD/MXN

Blake Morrow Forex Analytix

The EEM (emerging markets index) vs the USDMXN is still one of my favorite correlations in the markets. Today, the EEM has bounced back to the 38% retracement and underside of a broken trend line. And based on the negative earnings we have seen in tech land, if the market looks to sell the EEM tomorrow that could make the USDMXN ripe for a bounce from the sub 20.0000 exchange rate. Keep in mind, Banxico delivered a surprise hike a few weeks ago. You know how far the MXN has rallied? Not much, as we are near those levels even after a recovery in EEM and stocks (SPX) at all time highs.

Author

Blake Morrow

Forex Analytix

Blake Morrow spent most of his professional career as the Chief Currency Strategist for Wizetrade group for 15 years, and then the Senior Currency Strategist for Ally Financial after the acquisition of Tradeking which owned the Wizetrade Group.

EUR/USD makes a U-turn, focus on 1.1900

EUR/USD’s recovery picks up further pace, prompting the pair to retarget the key 1.1900 barrier amid further loss of momentum in the US Dollar on Wednesday. Moving forward, investors are expected to remain focused on upcoming labour market figures and the always relevant US CPI prints on Thursday and Friday, respectively.

GBP/USD sticks to the bullish tone near 1.3660

GBP/USD maintains its solid performance on Wednesday, hovering around the 1.3660 zone as the Greenback surrenders its post-NFP bounce. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold holds on to higher ground ahead of the next catalyst

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of modest losses in the US Dollar and despite firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.