- Mexico’s Peso drops to lifetime lows, taking month-to-date losses to 23 percent.
- USD/MXN’s technical indicator is reporting overbought conditions.
Mexican peso continues to lose ground amid the relentless sell-off in oil and the broad-based haven demand for the US dollar.
The local currency is currently trading at a record low of 24.20 per US dollar, representing a solid 23 percent slide on a month-to-date basis. Meanwhile, the West Texas Intermediate (WTI) oil is currently reporting a staggering 50 percent drop on a month-to-date basis.
Commodity futures listed in China are witnessing a huge sell-off this Thursday morning, as noted by Yuan Talks. Notably, oil futures are down over 7 percent.
In the FX markets, the US dollar is drawing haven bids and is scoring gains even against traditional haven currencies like the Japanese yen.
From a technical perspective, USD/MXN is showing little signs of buyer exhaustion. The 14-day relative strength index is reporting extreme overbought conditions with an above-80 print. The indicator, however, would gain credence if and when signs of bull fatigue emerge on the price chart in the form of a doji or other candlestick patterns like bearish engulfing, bearish outside day, etc.
Daily chart
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Trend: Bullish
Technical levels
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