The USD/MXN rebounded on Thursday on the back of a stronger US dollar but failed to recover so far the level it had before the FOMC meeting. The greenback gained momentum amid some risk aversion and boosted by a rally in the DXY.
The Mexican peso remains with a positive outlook versus the US dollar supported by the dovish Fed. The USD/MXN bottomed yesterday at 18.73, a level last seen mid-October, posting the lowest close since the beginning of Andrés Manuel López Obrador presidency.
From the lows bounced modestly to the upside and during today’s American session broke above 18.80 and peaked at 18.93. As of writing, trades at 18.87, up for the day but still down 1.75% for the week. The Mexican peso is among the top performers over the last five days.
USD/MXN Technical outlook
The USD/MXN holds a bearish tone despite today’s rebound. The recovery back above 18.85 removed some pressure of the US dollar. Below 18.80 a test of 18.70 is expected. The area around 18.70 is a substantial barrier, and a break lower could clear the way for a slide to the next strong support seen at 18.45/50.
On the upside, the next resistance level is seen at 19.02, followed by 19.10. A daily close back above 19.22 should signal the end of the Mexican peso’s rally in the short-term.
- Mexican peso corrects after rising to the highest level since mid-October.
- Greenback recovers across the board from the losses that followed Fed’s meeting.
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