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  • Mexican peso under pressure amid risk aversion across financial markets.
  • USD/MXN breaks 21.00 area, reaffirms bullish outlook.

The USD/MXN broke above 21.00 and rose further. It peaked at 21.41 before pulling back to the 21.25 area. The rally reinforced the bullish outlook. Currently, it  is  hovering around a technical area, and a close above 21.30 would suggest the momentum remains firm, even despite overbought readings.

The move off highs suggests the possibility of some consolidation before another move. With sharp moves in Wall Street, the week might not be over. Also, the US dollar’s profit-taking correction is not looking favorable to go on at the moment.

Above 21.35, the USD/MXN could head toward the next target that is seen at 21.50. The area 21.45/50 is a relevant resistance that could limit more gain, favouring some correction. If the move higher continues, there is not much protection toward 22.00; an interim resistance is seen around 21.75.

On the flip side, a correction might find support at 21.10 and then 21.00. A relevant level continues to be 20.60: a decline below would alleviate the bearish pressure.

USD/MXN daily chart