USD/MXN KEY POINTS:The Mexican peso has largely traded with a constructive bias towards the U.S. greenback since July 21, however mounting COVID-1
USD/MXN KEY POINTS:
- The Mexican peso has largely traded with a constructive bias towards the U.S. greenback since July 21, however mounting COVID-19 dangers might bitter market temper and weigh on EMFX
- Rising instances of the coronavirus delta variant world wide recommend the scenario might worsen earlier than it will get higher
- On this article we talk about the primary technical ranges in play for USD/MXN
Mexican Peso Weekly Forecast: USD/MXN Again Inside Key Vary as USD Flops
The Mexican peso has largely traded with a constructive bias towards the U.S. greenback since July 21, as proven on the day by day chart beneath. Throughout this time interval, USD/MXN has dropped from the 20.20 space in the direction of the 19.90 mark, a 1.5% retracement in lower than two weeks.
Falling US Treasury yields and financial coverage divergence between Banxico and the Federal Reserve, at a time when the financial restoration is gaining traction in Mexico, have been MXN’s important bullish drivers. Whereas the backdrop stays considerably constructive over the medium time period, there’s a main menace looming over EMFX and danger property: the COVID-19 delta-variant.
Just lately, a number of nations comparable to Australia, Japan, the Philippines and now China have re-imposed partial or whole lockdowns to curb the unfold of the extra contagious pressure of the virus. With group transmission rising within the U.S. and different areas, traders consider it’s only a matter of time earlier than extra containment measures are carried out worldwide. The specter of additional lockdowns or different counter-epidemic measures, justified or not, might quickly start to dent danger urge for food, boosting secure haven property.
In instances of financial uncertainty and heightened public well being issues, volatility tends to rise sharply in tandem with demand for US {dollars}. This case can drive USD/MXN increased as merchants brace for bother and cut back EMFX publicity.
From a technical standpoint, USD/MXN is presently probing help within the 19.85 space, a flooring outlined by a short-term bullish trendline in play since early June. If worth manages to sink beneath this zone decisively, sellers might intention in the direction of 19.65. A transparent break right here may even see the following help on the 19.00 psychological mark.
Alternatively, if USD/MXN levels a short lived rebound on risk-off temper, the primary resistance comes at 20.20 (200-day shifting common). If this technical barrier is overcome, shopping for momentum might push worth in the direction of the 20.75 area, the place the June excessive converges with a long-term bearish trendline.
USD/MXN TECHNICAL CHART
Supply: TradingView
EDUCATION TOOLS FOR TRADERS
—Written by Diego Colman, DailyFX Market Strategist
factor contained in the
factor. That is most likely not what you meant to do!Load your utility’s JavaScript bundle contained in the factor as an alternative.
www.dailyfx.com