USD/MXN Drops to Fresh Weekly Lows Under 22

The USD/MXN is falling for the third day in a row on Friday. Recently it bottomed at 21.76, reaching the lowest level since September 23. The Mexican peso remains strong and is among the top performers of the week.

After being rejected from above 22.50, the USD/MXN started a move to the downside that continues. The pair now is facing a strong support around 21.70/80; a converging area of a horizontal support and the 20 and 200-day moving averages. A close below would expose the next support at 21.50.

On the upside, a daily close in USD/MXN above 22.50 should clear the way to further gains and a test of the September high around 22.70.

“We might only see a slight depreciation during the 4th quarter with the presidential elections in the US, leading to some uncertainty on the future relationship between the US and Mexico. After the outcome of the election, regardless of the winner, there is room for some MXN appreciation,” mentioned analysts at MUFG Bank in their monthly report.

Reference:

FXStreet, 2020-10-02, “USD/MXN drops to fresh weekly lows under 22.00, MXN remains strong”