February 06, 2023 16:04 GMT
Peso Under Further Pressure Amid Greenback Strength, Technical Break
- USDMXN briefly touched a session high of 19.2906, rising over 1.5% on Monday as further broad greenback strength underpins the USDMXN correction.
- As noted, the pair made a marginal new low below the 2020 lows last Thursday and the psychological 18.50 level has held very well. The relief rally now tallies at around 4% in just over two sessions and the pair is trading at a one-month high as traders test the Peso’s resiliency ahead of this week’s Banxico meeting.
- While almost all surveyed analysts are expecting a 25bp increase from the central bank on Thursday, Itaú note that they don’t discard the central bank signalling an end to the hiking cycle in this meeting given the recent dovish tone of the Fed.
- As pointed out earlier, the break of 19.11 strengthens a bullish theme and signals scope for a stronger short-term recovery, towards the 19.40 handle initially with the December highs around 19.90 marking a more significant chart point.