- Pair breaks multi-day range and jumps toward 19.30.
- Mexican peso drops more than 1%, the worst day since November.
A stronger US dollar across the board boosted the USD/MXN pair to the upside. After breaking the key resistance level around 19.20, the pair gained more strength and rose to 19.28, reaching the highest level since January 9.
The pair is trading near the top, consolidating significant daily gains and clearly above 19.20. The rally so far was capped slightly below 19.30. The outlook favors the upside as long as it holds on top of 19.20.
The combination of a stronger US dollar, particularly against Emerging market currencies and technical factors contributed to the rally of USD/MXN. The greenback is also higher versus European currencies trading at fresh 2019 highs against the euro. Lower crude oil prices also weighed on the Mexican peso. The WTI barrel dropped to the lowest in three weeks.
Levels to watch
After trading in a small range since the beginning of the months, between 19.00 and 19.20, today broke to the upside. The area around 19.20 is now immediate support.
On the upside, the next strong resistance level is 19.30. A break higher would target the 19.45 zone that it is likely to be followed by a retreat before another potential move higher. On the downside, below 19.20 the bullish tone would ease. The key short-term support is the 19.00 zone. A break lower would expose 2018 lows seen at 18.85/87.