- An improvement in market sentiment pushed emerging market currencies higher against US dollar on Wednesday.
- USD/MXN posted the third decline in a row and extended the retreat after hitting 2-month highs last week.
The USD/MXN pair dropped today for the third-day in-a-row and found support slightly above the 19.00 zone. It reached at 19.01, the lowest level in two weeks.
Near the end of the session, USD/MXN was trading at 19.03, consolidating losses. It broke the key technical support at 19.15 and accelerated the slide. The area at 19.00 capped the downside but the Mexican peso confirmed most of its daily gains.
The move lower took place on the back of a weaker US dollar amid risk appetite and on a lower-than-expected US PPI reading. Also contributed to the slide, higher crude oil prices and optimism about the ongoing negotiations between the US and Canada regarding NAFTA.
USD/MXN Levels to watch
To the downside, immediate support is seen at 19.00 and below here attention would turn to the 18.80/85 area. A break below the last one would push price under a key short-term bullish trendline. On the upside, resistance now might be seen at 19.15, followed by 19.25 and the key 19.35/40 area. If the US dollar rises above 19.40, more gains and a test of September highs seems likely.
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