USD/MXN finds support at 20.85, rises to 21.05
- Recovery of the Mexican peso versus the US dollar losses momentum after reaching three-day highs.
- Dollar posts mixed results amid a deterioration in market sentiment.
- USD/MXN key support at 20.85 and 20.75.
The USD/MXN is rising on Thursday after falling sharply on Wednesday from the highest level in three months near 21.50. The correction found support at 20.85. As of writing the pair is hovering around 21.00.
After the release of US economic data, USD/MXN peaked on Thursday at 21.06 and then pulled back. The move back under 21.00 continued even amid a decline in equity prices and despite higher US yields. The Dow Jones falls 1.38% and the Nasdaq 2.27%. Crude oil prices are up, but off lows.
The war in Ukraine continues to be the key driver. Regarding economic data, US inflation reached 7.9% (annual) the highest level since 1982. Next week, the Federal Reserve will likely rise interest rates.
The trend in USD/MXN is bullish. A consolidation above 21.10 would expose the next resistance at 21.30. A decline under 20.80 should alleviate the bullish pressure, while under 20.70 (horizontal support and 20-day Simple Moving Average) the bias should change to neutral.
Technical levels