USD/MXN jumps 2% to the key 19.30 area as stocks drop sharply
- Emerging markets assets tumble on Wednesday amid risk aversion.
- Mexican peso among worst performers, slides 2.10% against US dollar.
The USD/MXN pair jumped today from 18.85 to 19.29. As of writing, it was trading at day’s highs, consolidating on top of 19.15 while holding below the intraday weekly high set on Monday at 19.36.
Pressure re-emerges
After a brief pause on Tuesday, the pressure on Emerging Markets assets emerged again on Wednesday but today it was not triggered by a sell-off of the Turkish lira that was sharply higher, recovering from recent losses. Emerging market currencies were falling sharply lead by the South African rand (-2.95%). Also, the Russian ruble (-1.80%) and the Brazilian real (-1.30%) were under pressure. Even the renminbi was significantly lower with USD/CNH near the 7.00 handle, at the highest level since January 2017.
Equity markets worldwide were lower, including Wall Street indexes. The upbeat US retails sales report did not change the mood among investors: the Dow Jones was falling 1.25% and the Nasdaq was down 1.75%.
USD/MXN Technical levels
The short-term momentum points to furthers gains in the USD/MXN pair. The immediate resistance area is located at 19.30, above that level attention would turn to the weekly high at 19.36 and then to the 19.50 barrier that should limit the upside, favoring some correction. If the dollar breaks and holds above, it would open the doors to more gains. On the flip side, the 19.15 area has become a support level followed by 18.95 and 18.85 (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.
