• USD/MXN surges to a one-week high.
  • Fitch downgrades Mexico to BBB-, outlook stable.
  • US Dollar remains on the front foot amid broad risk aversion.

Early Thursday morning in Asia, global rating giant Fitch downgrades Mexico’s credit rating from BBB to BBB- with a stable outlook.

Following the news, the USD/MXN pair surged from 23.95 to 24.30, currently around 24.23, while also probing the weekly top.

Also contributing to the pair’s strength could be the US dollar’s strength amid a broad risk-off wave mainly driven by the rise in the coronavirus (COVID-19) fatalities, downbeat US data and fears of the global recession.

Furthermore, oil price weakness can also be counted as a positive for the pair due to Mexico's reliance on the energy industry. WTI dropped on Wednesday, currently pressured around $20.00, as a surge in the official inventory data from the US added weakness into the oil benchmark.

While portraying the risk-off, Wall Street closed in red and the US 10-year Treasury yields dropped 11 basis points to 0.635% by the end of Wednesday in the US markets.

Moving on, traders will keep eyes on the US economic docket and the virus updates for fresh impetus while oil catalysts will also have their effects on the pair.

USD/MXN forecasts chart

Following its break of 200-HMA, USD/MXN is currently rising towards 24.80. It’s worth mentioning that sellers will look for entry below 23.80.

Trend: Further recovery expected

Additional important levels

Overview
Today last price 24.2572
Today Daily Change 0.8659
Today Daily Change % 3.70%
Today daily open 23.3913
 
Trends
Daily SMA20 24.0339
Daily SMA50 21.4156
Daily SMA100 20.1963
Daily SMA200 19.8039
 
Levels
Previous Daily High 23.7578
Previous Daily Low 23.3885
Previous Weekly High 25.7809
Previous Weekly Low 23.3192
Previous Monthly High 25.459
Previous Monthly Low 19.1536
Daily Fibonacci 38.2% 23.5296
Daily Fibonacci 61.8% 23.6167
Daily Pivot Point S1 23.2673
Daily Pivot Point S2 23.1432
Daily Pivot Point S3 22.898
Daily Pivot Point R1 23.6366
Daily Pivot Point R2 23.8818
Daily Pivot Point R3 24.0059

 

 

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