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USDMXN Extends Pullback, Seen 1.65% Lower Intra-Day

MEXICO
  • USDMXN is trading 1.65% lower on the session and has pulled back 2.8% from the earlier intra-day highs. Buoyant equity markets and pressure on the front-end of the US treasury curve is fuelling the reversal for the Peso which was the worst performing currency on Monday. Further emphasising the reversal, the weaker JPY is underpinning a significant 4.6% bounce from yesterday’s lows in MXNJPY.
  • Overall, USDMXN’s sharp rally higher on Monday extended the recovery that started last week. The move lower today is considered technically corrective for now.
  • Price has breached both the 20- and 50-day EMAs and has traded above the 19.00 handle. The next key short-term resistance is at 19.2906, the Feb 6 high. A break would pave the way for strength towards the 19.50 handle and 19.5882, the Dec 30 high. 18.5054, the Feb 24 high, is the first support to watch.

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