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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
MXN
- As noted earlier in the week, the break below the 20.00 mark highlights a breach of the key support at 20.0520, Feb 2020 low.
- This reinforces the bearish theme and note too that recent weakness has resulted in the break of a long-term trendline support drawn from the Mar 29, 2002 low - a key technical break.
- Additionally, a bearish theme remains in play for USDMXN despite the bounce between Aug 15 – 19 and general renewed greenback optimism. The recent break of support at 20.2080, Jul 29 low and the 20.00 handle, has strengthened a bearish condition and exposed 19.8193, the Jun 27 low.
- The continued resilience of the ‘Super’ Peso comes amid yet another upside surprise to both core and headline CPI on Wednesday. While central bank rhetoric has indicated the board are likely to follow the Fed in September, today’s data will certainly be a matter of concern ahead of the September 29 decision with markets unable to rule out the potential for a third consecutive 75bp hike.
- From the sell-side we mentioned that Goldman Sachs said preferred staying short EUR/MXN, “which allows for exposure to high LatAm yields, but with a tighter connection to a still-strong US growth outlook, and somewhat less vulnerability to further wobbles in China or the commodity complex.”
- Interestingly, Citigroup have taken profit on its short EUR/MXN option position, expecting a few external developments to weigh on the peso. They note that US Treasury yields are trending higher with 2-year tenor likely to reach 3.75%; the highs might already be in for Nasdaq and S&P with equity indexes likely to go lower again.
- The focus technically is on a continuation lower for EURMXN. The next support levels to watch are:
- 19.6250, low Apr 14 2017
- 19.4545 2.236 projection of Nov ‘21 - Oct ‘21 - Feb ‘22 swing
- 19.1719 2.382 projection of Nov ‘21 - Oct ‘21 - Feb ‘22 swing
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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