- USD/MXN remains around 20.00, maintaining a sideways bias.
- Rise in equity markets offers support to emerging currencies.
USD/MXN remains stable, trading near the 20.00 zone. Price continues to move sideways with current risks skewed to the downside but no clear signs of a possible breakout
The rally in equity markets is giving support to emerging market currencies against the dollar. Added to this is the stability of Treasury bond yields.
In U.S.A. the Dow Jones is up 1.92% and the Nasdaq 1.87%. The 10-year Treasury bond yields 3.97% and the 2-year tranche 4.41%. DXY loses 0.09%. Regarding data, a rise in industrial production in September of 0.4% was known, above the 0.1% expected. The data did not have a significant impact.
Among the raw materials, metals rise modestly while oil suffers a significant drop and trades at weekly lows. The WTI trades below $83.50, down more than 2%.
The lateralization of the USD/MXN is taking place between the 19.95 and 20.15 zones. Just a close outside of these levels could give clearer signals of a directional move. Above the upper bound, the next levels to watch are seen at 20.25 and 20.45. To the downside, break of the lower bound, would expose critical support at 19.80
Technical levels
Source: Fx Street
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