USD/MXN rebounds back to 24.30 amid risk aversion


  • Mexican peso outperforming despite pullback against US dollar.
  • USD/MXN finds support at the 24.00 area and rebounds.

The USD/MXN bounced to the upside after reaching 24.00 and is back at the 24.30 area. Risk aversion weakened the Mexican peso that erased all gains versus the greenback.

After equity prices in Wall Street resumed the decline, the USD/MXN turned to the upside. The Dow Jones is losing 2.18% and the Nasdaq 2.20%. US yields are falling despite comments from Fed Chair Powell against negative rates.

Despite losing ground versus the greenback, the Mexican peso is outperforming on Wednesday. The best among emerging markets is the Chilean peso (USD/CLP down 0.90%) while the worst the Colombian peso (USD/COP +0.70%).

In Mexico, attention turns to the central bank that on Thursday will announce its decision on monetary policy. A 50bps rate cut is expected.  “We see MXN remaining under fundamental pressure, however, the degree to which Banxico surprises with the size of easing or with a dovish tone at the May meeting may negatively impact the peso in the short term”, explained analysts at TD Securities.

Technical outlook

The pair continues to make higher highs and higher lows, a bullish sign. A consolidation above 24.35 should open the doors for a test of 24.50. On the lie side, the 24.00 area is the immediate support and a break lower would target 23.80. The next support emerges at 23.50.

USD/MXN

Overview
Today last price 24.249
Today Daily Change -0.1131
Today Daily Change % -0.46
Today daily open 24.3621
 
Trends
Daily SMA20 24.2225
Daily SMA50 23.5456
Daily SMA100 21.1982
Daily SMA200 20.3127
 
Levels
Previous Daily High 24.4133
Previous Daily Low 23.756
Previous Weekly High 24.8895
Previous Weekly Low 23.5515
Previous Monthly High 25.7809
Previous Monthly Low 23.2825
Daily Fibonacci 38.2% 24.1622
Daily Fibonacci 61.8% 24.0071
Daily Pivot Point S1 23.941
Daily Pivot Point S2 23.5199
Daily Pivot Point S3 23.2837
Daily Pivot Point R1 24.5983
Daily Pivot Point R2 24.8344
Daily Pivot Point R3 25.2555

 

 

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