USD/MXN Technical Outlook Worsens as Yearly Highs Come into Play

USD/MXN Highlights:

  • USD/MXN could soon accelerate lower despite risk trends
  • Yearly high levels from 2018 and 2019 broken and nearing, respectively

USD/MXN could soon accelerate lower despite risk trends

USD/MXN is in danger of picking up more momentum as the recent decline takes out support levels and gains ‘negative curvature’ to its path. It is a somewhat surprising development given that U.S. equities, the main barometer for risk appetite, is in sell-off mode.

Perhaps the market will begin to shun the higher yielding Mexican peso with continued stock market weakness, and lead USD/MXN back higher, perhaps not. The divergence in paths here is exactly why while correlations between markets can provide insight, they can also prove to be deceitful, and we need to also take the specific market in question and analyze it on its own merits.

Looking at USD/MXN in a bubble, we saw price this week drop below

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