USD/MXN drops further to 17.70, fresh 1-year low

The US dollar is falling on Thursday against commodity and emerging market currencies, extending weekly losses. Among them, the Mexican peso has been outperforming. Today it reached again a 1-year high. 

USD/MXN drops further 

The pair broke below 17.80 yesterday and today fell further. Recently bottomed at 17.70, the lowest level since May 5, 2016. It is trading at 17.72, down almost 3% from a week ago and 19.50% from January highs. 

A weak US dollar and rising crude oil prices pushed USD/MXN further to the downside today. The WTI barrel is up 1.15%, at $46.00 near 1-week highs. 

Levels to watch 

From a technical perspective, the trend points to the downside and also momentum. The slide back below 18.00 and particularly after yesterday’s break of the 17.80 barrier, reinforced the negative tone. 

If the decline continues, support levels might be located at 17.70 (daily low), 17.60, 17.45 and 17.00/05 (2016 lows). To the upside, the 17.80 area is now the immediate resistance, followed by 18.00 and 18.40 (Jul high).