USD/MXN breaks above 22.20 to highest in almost a week as dollar recovers
- Emerging market currencies under pressure amid risk aversion.
- US dollar tuned positive at the end of the week, trimming recent losses.
The USD/MXN pair jumped during the American session amid a rally of the US dollar across the board. The greenback is trimming weekly losses on Friday, particularly versus emerging market currencies amid risk aversion.
The greenback was showing some signs of stabilization and gained momentum over the last hours, also boosted by a rebound in US yields. The USD/MXN broke the intermediate resistance seen at 22.20/25 and climbed to 22.29, reaching the highest level since Monday. It then pulled back, and it is hovering around 22.25.
From a level it had a week ago, the MXN is at the same level, far from the one-month high it hit on Wednesday. The positive momentum faded as equity prices in Wall Street pulled back and amid rising concerns about the global economic recovery.
Among emerging market currencies, the worst perform on Friday is the South African rand (USD/ZAR up 1.45%) followed by the Russian ruble (USD/RBL up 1.40%) and then comes the Mexican peso (USD/MXN +1.15%).
Watch 22.40/45
If USD/MXN keeps rising, it would face a critical resistance around 22.40/45. The mentioned area contains the 20 and 55-day moving averages but also a downtrend line. So a firm break above would likely negate the short-term bearish bias, suggesting more gains ahead.
On the flip side, if the pair holds below 22.40, the bearish bias will remain in place. Support levels are located at 22.20, 21.90 and then the strong 21.50 barrier.
Technical levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
