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  • Mexican Peso drops against the US Dollar for the fourth-day in-a-row.
  • Emerging Market currencies post mixed results as the DXY strengthens.  

The USD/MXN rose to 19.75 at the beginning of the American session reaching the highest level since September 6. It then pulled back but held on top of 19.70. As of writing trades at 19.72, on its way to the strongest close in three weeks.  

The Greenback continues to appreciate against the Mexican Peso, and accumulates a gain of 2% from September lows. The improvement in market sentiment failed to limit the upside in USD/MXN that remains supported by technical factors.  

Cautious optimism in financial markets after White House officials downplayed news that it is considering limiting U.S. investors’ portfolio flows into China. A U.S. Treasury official denied there were plans to stop Chinese companies from listing on U.S. exchanges. Separately, high level talks between China and the U.S. are expected to resume in Washington on October 10-11th“, explained BBVA analysts.  

Despite posting mixed results versus Emerging market currencies, the US Dollar Index is up 0.25% about to post the highest close since May 2017. Data from the US showed that the Chicago PMI fell surprisingly below 50 to 47.1. On Tuesday, PMIs are due.  

Levels to watch  

The USD/MXN upside bias is likely to remain intact as long as it holds above 19.57 (20-day moving average). Currently, it is facing a resistance area around 19.75. A consolidation on top of 19.80 would signal more gains ahead and a test of 20.00. On the flip side, 19.45/50 and 19.30 continue to be the two critical supports.