USDMXN rises to highest level in three days near 19.50 on a stronger Dollar
- Mexican Peso erases weekly gains versus US Dollar.
- A decline in equity markets weighs on emerging market currencies.
- Slides in USDMXN seem limited while above 19.30.
The USDMXN rose from 19. 30 and peaked at 19.47, the highest level in three days during Thursday’s American session, boosted by a stronger US Dollar and a deterioration in risk sentiment.
US Dollar up across the board
Economic data from the US released on Thursday showed an unexpected decline in the Philly Fed to -19.4 in November from -8.7. In a different report, Continuing Jobless Claims rose to the highest level since April. Housing Starts and Building Permits dropped in October, although numbers came in above expectations.
The Dollar Initially it dropped but then recovered strength boosted by higher US yields and also risk aversion. In Wall Street, the Dow Jones is falling by 0.60%, the Nasdaq drops by 0.80% and the S&P 500 by 0.98%. The deterioration in risk sentiment weighs on emerging market currencies with the Mexican Peso no among the worst performers.
Trend still favors the MXN
Despite rising on Thursday, USDMXN remains with a bearish bias. In the short-term it continues to consolidate after finding support above 19.30. A firm break lower would open the doors to further losses targeting 19.15 initially and then 19.00/05.
On the upside, initial resistance emerges at 19.50 and then a stronger area at 19.60. A daily close above would alleviate the bearish bias, suggesting a test of 19.80.
Technical levels
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.
