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- USD/MXN Price Analysis: So far, just a correction
USD/MXN Price Analysis: So far, just a correction
- Mexican peso extends recovery amid improvement in risk sentiment.
- USD/MXN drops for the second day in a row.
- Key support at 20.30/35, dollar to strengthen above 20.45.
Emerging market currencies are rising of the second day in a row on Monday, amid a global improvement in market sentiment. Steady US yields and higher commodity prices offer relief to riskier currencies, like the Mexican peso.
The USD/MXN peaked last week above 21.00, levels not seen since March. It failed to hold above 21.00 (also to post a daily close above 20.90) and it pulled back initially to 20.60. On Friday, it broke lower and bottomed on Monday at 20.32, near the 20-day Simple Moving Average.
During the American session, USD/MXN is rebounding from the key support area around 20.33. If it moves back above 20.45, the Mexican peso would lose strength, opening the doors for a test of 20.70 that is again a critical resistance.
The retreat from monthly highs so far, represents a correction in USD/MXN. The short-term bias remains bullish. A consolidation below 20.45 would keep the upside limited. A close under 20.22 could change the short-term bias to neutral.
USD/MXN daily chart
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