USD/MXN breaks critical resistance, rises above 19.30 to highest in four weeks
- Mexican peso accelerates losses versus the greenback, as technicals add to the negative tone.
- Former Bolivian President Morales lands in Mexico.
On a bad day for Latin American currencies, the Mexican peso was having a decent performance but all changed over the last two hours. The USD/MXN pair broke above 19.20/25, a critical resistance and jumped to 19.33, reaching the highest level in almost a month.
The pair accelerated to the upside after being able to remain relatively steady amid a rally of the US Dollar against Latin American currencies. Social and political turmoils in the region weight on market sentiment.
In a Mexican plane, former Bolivian President Evo Morales landed in Mexico that offered asylum. While Mexican President Lopez Obrador took a position supporting Morales, US President Donald Trump considered the resignation as a significant moment for democracy in the Western Hemisphere. The difference between the presidents represents a new risk in their relationship.
More gains ahead?
As long as USD/MXN holds above 19.25 more gains seem likely. The momentum favors the upside after breaking a four-week range, rebounding from a long-term support level. The bullish breakout clears the way toward 19.45/50, the next strong resistance. At current prices, the outlook favors the upside. A retreat back under 19.30 would ease the pressure, while under 19.20 a move back to the previous range 19.00/20 seems likely.
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.
