USD/MXN retreats sharply after hitting 1-month highs

USD/MXN turned to the downside on Thursday and recovered most of the weekly losses. The Mexican peso gained momentum despite the decline in crude oil factors and probably amid some profit taking. 

Earlier today USD/MXN climbed to 19.54, the highest level since September 30 but then turned to the downside, and it was hovering around daily lows at 19.13. From the highs it lost 2.10%, making an important reversal. 

The sharp decline implicates a rejection from above 19.50 but the pair continues to hold a strong bullish momentum. Today’s decline gives some air to the peso and also to Mexican officials considering, that from the level it had 10 days ago, to today’s highs, climbed more than 5%. 

MXN still exposed 

The pair continues to be highly exposed to US politics and positive correlated with the odds of Donald Trump winning the presidency on next week elections. In the short-term also tomorrow’s NFP could impact on the pair 

To the upside, the area around 19.50 is the immediate key resistance while to the downside, the relevant support could be seen at 18.85, an important horizontal level and also where the 20-day moving average stands.