USD/MXN hits 1-month lows as Mexican peso soars

Mexican peso gains more than 2% against the US dollar, biggest gainer of the day.
USD/MXN slides to test strong support area around 19.50.

Matías Salord FXStreet

The combinations of a stronger Mexican peso after Sunday’s election and a recovery in Emerging Markets that weakened the greenback, pushed USD/MXN sharply to the downside.

The pair lost more than 2% and bottomed during the American session at 19.50, the lowest level since late May. After a pause in the correction, USD/MXN resumed the decline on Tuesday. From June highs, the pair lost 8%. The pair approached 21.00 last month before turning to the downside.

The demand for the Mexican peso gained momentum following a conversation between US President Trump and Mexican President-elect López Obrador (AMLO). They talk about border security and trade. Also the peso received an impulse from AMLO’s comments about its economic policy.

USD/MXN Levels to watch

The current short-term tone is clearly bearish and it is about to test the 19.50 zone. Below that level, the next strong support is the 19.25/30 zone. Resistance levels might now be located at 19.70, 20.05 and 20.25 (20-day moving average).

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.

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