USD/MXN rebounds from two-month lows, holds above 21.45/50

• On a positive day for emerging market currencies, the Mexican peso dropped modestly versus the US dollar.
• USD/MXN reached fresh multi-month lows but it quickly rose back above 21.50.

The Mexican peso did not benefit from a positive tone around financial markets and fell against the US dollar. In Wall Street, the rally continued and currencies, like the Brazilian real, soared. The USD/MXN held steady after defending the 21.45/50 area.

The USD/MXN bottomed during the Asian session at 21.47, the lowest intraday since mid-March but then rebounded, rising to 21.79. Over the last hours, it has been hovering around 21.60, marginally higher for the day.

Levels to watch

From a technical perspective, the bias continues to point to the downside but in order to clear the way to more losses, USD/MXN needs to clearly break under 21.45/50. The next strong support stands at 21.30.

A failure to break in the short-term below 21.45 would point to an interim bottom. The 22.00 area is the current resistance area, above the USD/MXN correction could extend to 22.55.

More levels