USD/MXN jumps to one-month highs above 23.00
- BRL and MXN are among the worst performers on Friday.
- Risk aversion weighs on emerging market currencies, US dollar soars.
The USD/MXN accelerated to the upside during the American session and jumped to 23.07, reaching the highest level since May 22. A sharp slide in Wall Street weakened emerging-market assets.
As of writing, USD/MXN trades at 22.97, holding above 22.80 and on its way to the highest close in a month, favoring further gains ahead, particularly if climbs above 23.00.
Also, fundamental factors are boosting the pair. The Dow Jones is falling 2.20% or 560 points while the Nasdaq drops 1.65%. Analysts offer many reasons for the retreat, from overvalued equity prices, to profit-taking, the spread of coronavirus in the US, and risks emerging from fresh US-China tensions related to Hong Kong. The Brazilian real and the Mexican peso are the biggest losers on Friday among the most traded currencies.
US data released on Friday included a rebound in personal spending, a decline in income, and a lower than expected reading of consumer confidence indicators. Market participants ignored those numbers.
USD/MXN Testing 23.00
The USD/MXN is about to post the third weekly gain in a row and is testing the 23.00 area. The 22.80 is critical, and a daily close above would point to further gains. The next resistance is seen at 23.20, followed by 23.50/55.
On the flip side, support levels for USD/MXN emerge at 22.60 and then the essential 22.25, a horizontal level, and also the 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.
