• Risk aversion intensifies across financial markets.
  • Treasuries also decline, US yields at multi-year highs.
  • USD/MXN break key resistance levels, tests 20.45/50 area.

The USD/MXN is rising sharply on Monday as global markets tumble. The pair jumped from below 20.00 to 20.50, hitting the highest level since May 2. It is having the biggest daily gain in months boosted by risk aversion.

Latin American currencies are the worst performers on Monday.  The USD/CLP (Chilean peso) gains 2.50%, followed by the USD/BRL (Brazilian real) up 2.25% and the USD/COP (Colombian peso) rises 2.20%. The USD/MXN rises by 2.30% and is about to post the highest close in a month.

The rally is testing the 20.45/50 resistance area. It is a zone that capped the upside in April and May. A break higher should trigger more gains targeting initially the 20.70 area. While under 20.45, losses in USD/MXN seem limited, with the new support levels seen at 20.15 and 20.00.

If the current mood in financial markets persists, the Mexican peso will likely remain under pressure. A recovery could limit the upside.

The economic calendar is clear in Mexico for the current week. The key event will be the Federal Reserve meeting. On Wednesday the FOMC will announce its decision. A 50bps rate hike is expected, although some analysts consider the possibility of a larger hike after the latest CPI numbers.

Technical levels

USD/MXN

Overview
Today last price 20.4487
Today Daily Change 0.4759
Today Daily Change % 2.38
Today daily open 19.9728
 
Trends
Daily SMA20 19.7555
Daily SMA50 19.9901
Daily SMA100 20.2515
Daily SMA200 20.4111
 
Levels
Previous Daily High 19.9983
Previous Daily Low 19.6182
Previous Weekly High 19.9983
Previous Weekly Low 19.4709
Previous Monthly High 20.5113
Previous Monthly Low 19.4131
Daily Fibonacci 38.2% 19.8531
Daily Fibonacci 61.8% 19.7634
Daily Pivot Point S1 19.7279
Daily Pivot Point S2 19.4831
Daily Pivot Point S3 19.3479
Daily Pivot Point R1 20.108
Daily Pivot Point R2 20.2432
Daily Pivot Point R3 20.488

 

 

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