• Mexican peso among worst performers on Thursday.
  • US dollar bounces sharply after updated strategy from the Fed as US yields soar.

The USD/MXN bottomed earlier on Thursday at 21.81, the lowest level since May but then it bounced dramatically, leaving the Mexican peso exposed to more losses in the short-term.

As of writing, USD/MXN trades at 22.22, the strongest level in a week. The dramatic reversal could point to more gains over the next days for the pair if current levels are sustained. A close above 22.25 would add support to the change in the short-term bias to bullish. Only a retreat under 22.00 would continue to favor the Mexican peso.

The Bank of Mexico released the minutes from its latest meeting when it cut the rate by 50 basis points. Board members considered that the economy's recovery will depend on the coronavirus and the development of a vaccine. Back then, one member voted against the decision. It was Irene Espinosa-Cantellano. According to her, there is a lesser room for monetary policy loosening considering that inflation has persisted above the target and foreign investor capital outflows.

A steady Mexican peso holds the key for more interest rate cuts. If USD/MXN turns sharply higher, then the loosening cycle could end sooner than expected.

USD/MXN daily chart

usdmxn

USD/MXN

Overview
Today last price 22.1706
Today Daily Change 0.2298
Today Daily Change % 1.05
Today daily open 21.9408
 
Trends
Daily SMA20 22.2273
Daily SMA50 22.4062
Daily SMA100 22.8472
Daily SMA200 21.4403
 
Levels
Previous Daily High 21.9853
Previous Daily Low 21.8785
Previous Weekly High 22.3306
Previous Weekly Low 21.9067
Previous Monthly High 23.0953
Previous Monthly Low 21.8473
Daily Fibonacci 38.2% 21.9445
Daily Fibonacci 61.8% 21.9193
Daily Pivot Point S1 21.8844
Daily Pivot Point S2 21.8281
Daily Pivot Point S3 21.7776
Daily Pivot Point R1 21.9912
Daily Pivot Point R2 22.0417
Daily Pivot Point R3 22.098

 

 

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