USD/MXN drops to lowest in a week, near 22.40
- Mexican peso up versus US dollar for the third consecutive day.
- Ongoing rally in Wall Street drives demand for riskier assets, favoring MXN.
The USD/MXN continues to slide from the one-month high reached on Tuesday at 23.23, and it recently dropped to 22.39, the lowest level in a week. As for writing, the pair is hovering around 22.50 off lows, holding a bearish bias.
Risk appetite across financial markets boosted the demand for the Mexican peso. US stocks are up by around 1% on average supported again by US economic data. June’s employment numbers surpassed expectations with the biggest monthly job creation on record.
The better tone across markets eased after new COVID-19 cases in the US, but still main indexes held in positive territory, supporting the demand for emerging-market assets.
Technical outlook
The USD/MXN broke a short-term uptrend line and extended the slide. At the moment, the pair is testing the 20-day moving average 22.42 after the 55-day moving average capped the rally at 23.15.
A close clearly below 22.40 would point to more losses, targeting 22.30 and below the next strong support stands at 22.05.
A rebound from current levels back above 22.80 would strengthen the greenback favoring a return to 23.00 and a test of the 55-day moving average.
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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.
