- US Dollar under pressure across the board as Santa’s rally goes on.
- USD/MXN breaks critical support and eyes 2019 lows.
The USD/MXN pair broke below 18.90 and tumbled to 18.80 reaching the lowest level since May. As of writing trades at 18.83. Consolidating below 18.90 and about to post the lowest close in eight months.
A decline of the US dollar across the board pushed the USD/MXN to the downside. Also technical factors favored the acceleration in the move lower. The improvement in risk appetite across markets continues to be supportive of the demand for riskier assets, including emerging market currencies.
A test of 2019 lows on the cards
After moving sideways for over a week, USD/MXN broke lower in the expected direction. Earlier in December, the pair dropped below a long-term uptrend line, opening the doors to more losses.
The area of 18.90 was a key intermediate support and now the next strong one stands around 18.75 (the intraday low of 2019 is 18.74). In order to alleviate the bearish pressure, the US dollar need to regain levels above 18.90. The next resistance is seen at 18.95 and 19.10.
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