USD/MXN drops below 19.20, to lowest in a week

• A weaker US dollar pushes USD/MXN to the downside. 
• Price drops under key short-term support. 
• Events ahead: FOMC minutes, Mexican inflation and Banxico minutes. 

The USD/MXN rose earlier today to the 19.30 area only to turn again to the downside, with the momentum strong enough to break the 19.20 barrier. The pair is trading at 19.13, the lowest level since February 11. 

Price is consolidation under the 19.20 area, signaling more losses ahead if it holds around current levels. The short-term bias and the momentum points to a test of 19.05, the next critical support. 

A decline of the US dollar was the main driver of price action. Lower US yields and some improvement in risk appetite hit the greenback. Emerging market currencies rose against the US dollar, although the Mexican peso was not among the top performers. The Brazilian real lead with a gain of almost 1% and the Chilean peso 0.85%. The Argentinean peso was the exception, losing 1%. 

Tomorrow in the US, the Fed will release the minutes of its latest FOMC meeting, Thursday will be the turn of Banxico’s minutes and on Friday, Mexican inflation data is due. US-China trade talks will take place over the week. 

USD/MXN Levels to watch 

To the upside, 19.20 is now the immediate resistance followed by 19.35 and 19.45. On the flip side, support levels are seen at 19.12 (20-day moving average), followed by 19.00 and 18.85/87 (January lows).