USD/MXN breaks below 19.50 to lowest since October

US dollar drops sharply on Friday against Emerging market currencies.
USD/MXN posts fourth weekly gain in-a-row.

Matías Salord FXStreet

The USD/MXN reversed sharply on Friday amid a decline of the US dollar against commodity and emerging market currencies. The pair approached 19.70 following an upbeat US jobs report but then turned sharply lower following comments from Fed’s Powell.

It broke below 19.50 for the first time since October and bottomed at 19.37. From the low bounced modestly to the upside and it was about to end the week hovering around 19.40, posting the fifth daily loss out of the last six days and the fourth consecutive weekly decline.

The trend lower in USD/MXN remains intact. The bearish bias prevailed despite the volatile across financial markets seen at the beginning of the week. The Mexican peso was not among the top performers of the week. The main winner was the Brazilian real after the inauguration of Jair Bolsonaro (USD/BRL lost more than 4%) seconded by the South African Rand.

USD/MXN Levels to watch

For the first time in almost three months, USD/MXN fell below the 100-day moving average that stands at 19.55. The mentioned level has become a resistance area, followed by 19.80 and 20.00 (psychological / 20-day moving average).

The 19.40 zone is a strong support area. The Mexican peso needs to break and hold below to clear the way for a bearish extension in USD/MXN. The next barrier is seen at 19.15/20; below attention would turn to 19.00.

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.

EUR/USD off highs, back to 1.1850

EUR/USD loses some upside momentum, returning to the 1.1850 region amid humble losses. The pair’s slight decline comes against the backdrop of a marginal advance in the US Dollar as investors continue to assess the latest US CPI readings.

GBP/USD clings to gains above 1.3600

GBP/USD reverses three consecutive daily pullbacks on Friday, hovering around the low-1.3600s on the back of the vacillating performance of the Greenback in the wake of the release of US CPI prints in January. Earlier in the day, the BoE’s Pill suggested that UK inflation could settle around 2.5%, above the bank’s goal.

Gold: Upside remains capped by $5,000

Gold is reclaiming part of the ground lost on Wednesday’s marked retracement, as bargain-hunters seem to have stepped in. The precious metal’s upside, however, appears limited amid the slightly better tone in the US Dollar after US inflation data saw the CPI rise less than estimated at the beginning of the year.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.