USD/MXN Price Analysis: Mexican Peso benefits from oil recovery

• USD/MXN extends the pullbacks from the record top.
• Upbeat comments from the Mexican Foreign Minister, Pemex seem to lure the Mexican Peso buyers.

USD/MXN steps back from the record high to 24.01, down 0.06%, amid the Asian session on Friday. The pair refreshed the record high to 24.65 on Thursday but trimmed some gains during the day-end pullback.

The Mexican Peso relies heavily on the oil moves and the latest recovery in the WTI benchmark, currently up 0.82% to $26.00, seems to disappoint the bears.

Also supporting the Mexican currency could be the comments from the state-run oil giant Pemex, Mexican Foreign Minister Ebrard and Finance Minister Herrera. While the Foreign Minister renewed hopes of the US-Mexico talks, the Finance Minister signaled that the oil prices will recover once the coronavirus crisis is resolved, Saudi Arabia and Russia resolve differences.

Read: Mexico’s Pemex says Mexican oil basket for export closed at $17.70 per barrel on March 19

On the other hand, the US dollar remains mixed amid the hope of a big stimulus on Monday as well as backed by the market’s rush to counter the coronavirus (COVID-19).

It should also be noted that the latest update about the likely cure, Gilead remdesivir, might turn the table if proved to be efficient in conquering the pandemic.

The risk-tone remains mixed with the US 10-year treasury yields bouncing back beyond 1.15% while most stocks in Asia are still in the red whereas Japan’s markets are off.

Investors will now pay close attention to further recoveries  of the oil prices, virus headlines for fresh direction.

USD/MXN forecast chart

Although the current pullback can recall Tuesday’s top near 23.24, the bears’ are less likely to enter unless witnessing a sustained break of the monthly trend line, at 22.45 now.