- Mexican peso among worst performers of the week affected by NAFTA, elections and EM jitters.
- USD/MXN retreats on Friday still heads for highest weekly close since January 2017.
The USD/MXN dropped on Friday to 20.63 after reaching earlier at 20.95, the highest level since January 2017. The retreat took place amid a pullback of the US Dollar across the board.
Still, the Mexican peso ended the week with important losses versus the greenback. Expectations about rate hike from the Federal Reserve, Emerging Market jitters, and NAFTA negotiations affected the currency.
The worst performers of the week were the Argentinean peso that lost more than 10% and the Turkish Lira, down 5.60%. In Latin American, the Brazilian real was flat for the week after the real strengthened on the back of a currency intervention plan. USD/MXN rose almost 2% and near the end of the week, it was hovering around 20.65.
USD/MXN Technical outlook
The bullish tone is intact despite Friday’s retreat. The area around 21.00 has now become the key resistance area. A consolidation above 21.00 could open the door for an extension of the rally with potential targets at 21.25 and 21.45.
To the downside, immediate support is seen around 20.60, below that level attention would turn to the 20.50/55 area that is a strong horizontal support and also a short-term uptrend line. A break lower would ease the bullish tone, signaling more corrective moves ahead.
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