USD/MXN extends slide to lowest in two months at 22.50 as Mexican peso outperforms

• Mexican peso rises across the board, extends monthly gains.
• USD/MXN drops to the 22.50 area, last seen back on March 17.

The Mexican peso is rising for the sixth day in a row on Monday and it trades at the highest since mid-March versus the US dollar supported by an improvement in market sentiment. USD/MXN dropped to test 22.50 and it remains near the lows, under pressure.

Among the most liquid currencies, the Mexican peso is the top performer on Monday and also considering the last five trading days. The rebound in crude oil prices and in equity prices boosted the currency that so far in May, is having one of the best months in history against the greenback.

The US Dollar is posting mixed results on Monday. It rose earlier but then pulled back as Wall Street futures printed fresh highs. Trading volume is expected to continue at extremely low levels amid a holiday in the US.

Economic data released on Monday included trade data from Mexico. Exports tumbled 40% in April while imports declined 37% from a year earlier. The trade deficit jumped to $3,087 million, the highest since January 2019.

Levels to watch

From a technical perspective, the bias continues to point to the downside in USD/MXN as it has been the case since it broke under 23.20 that now is the critical resistance. On the flip side, the 22.45/50 area is the immediate support followed by 22.20.