October 16, 2024 09:26 GMT
MEXICO: USDMXN Approaching Initial Resistance
MEXICO
- Additional factors supporting the USDMXN bounce this week have been concerns over the potential minimal impacts of China stimulus, geopolitical risk and soft China data out Monday and over the weekend continuing to weigh on sentiment.
- Yesterday’s downtick for equities and pressure on crude futures had the greatest impact on EM currencies, with broad weakness for Latin American FX a standout.
- Furthermore, lingering domestic concerns surrounding the Morena party’s reform proposals have been fundamental to the significant adjustment of MXN sentiment since the election earlier this year.
- Technical factors will have also assisted the bounce, with the pair failing to breach the 50-day EMA, an average the pair has been unable to close below since mid-July, keeping a bullish theme intact for now.
- Spot is approaching the first resistance and a key short-term hurdle for bulls at 19.8295, the Oct 1 high. A resumption of gains would refocus attention on key resistance and the bull trigger at 20.2181, the Aug 5 high.
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