- Mexican peso among the most affected on Thursday by the new fall in the stock markets.
- USD / MXN rises for the fourth day in a row.
The USD / MXN continues to move higher, supported by the advance of the dollar against emerging market currencies in a context of pessimism in financial markets. The cross today approached 21.50, reaffirming the bullish bias.
The price of the dollar in Mexico reached 21.49 on Thursday, the highest level in two weeks. After this, it fell back and stabilized for the moment around 21.35, on the way to having the fourth consecutive daily gain.
In the foreign exchange market, the dollar and the yen are among those that have risen the most, in a context of a sharp fall in the stock markets. The fear that the imposition of new restriction measures in Europe will generate a blow to the recovery of the economy, is affecting expectations about the pace of activity. In addition, the risk of the US electoral act next Tuesday is added.
The deterioration in expectations finds certain limits in the advancement of vaccines for COVID-19, but there is still a long way to go. The European Central Bank kept interest rates and the purchase program unchanged, indicating that it will carry out a “recalibration” in December. Among the factors to take into account is the vaccine leaflet.
Technical overview
The USD / MXN has changed the bias from short term to bullish. In case of overcome resistance of 21.50 a prolongation of the gains towards the 21.75 area would be expected. If the latter is broken, a visit at 22.00 looks highly probable.
In the opposite direction, supports from the current level are seen at 21.30, followed by 21.10, which is key to the current bullish bias. A fall below would leave the Mexican peso strengthened. In a broader view, the 20.80 / 85 area is the key support, the break of which will leave the doors open for a resumption of the downtrend.
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Credits: Forex Street

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