USD/MXN jumps to 11-week highs above 21.00

• Mexican peso among worst performers across the board on Monday.
• USD/MXN breaks above 21.00 for the first time in two months.

The USD/MXN jumped on Monday above 21.00 and peaked during the European session at 21.26, the highest intraday level since December 15. The Mexican peso is among the worst performers, hit by risk aversion.

Equities across the globe are falling on Monday. After a brief recovery, main stock indices at Wall Street are approaching daily lows. The Dow Jones is falling by 1.33% and the S&P 500 1.55%. The war in Ukraine continues to be the key driver.

At the beginning of the trading week, crude oil prices jumped almost 10% after the US said on Sunday it is looking to ban energy imports from Russia. Fears about the impact of the war on the world economy triggered a new fly to safety, hitting some emerging market currencies. The Russian ruble is suffering a record decline, losing more than 20% of its value. The USD/RUB rose above 150.00 during the last hour and is up 24%.

Economic data is likely to be offset by war headlines. Still investors will look into inflation numbers from Mexico and the US to be released on Wednesday and Thursday, respectively.

The USD/MXN holds a clear bullish bias. To the north, it faces a strong resistance area around 21.25/30; a break higher should clear the way to more gains. To the downside, now 20.95/21.00 is the immediate support, followed by 20.80.

Technical levels