- The USD / MXN is back from a multi-day low of 23.05.
- A pause in the WTI oil rally, a decline in the US dollar and virus problems in Mexico are probing the bears.
- U.S. activity data may offer intermediate indices ahead of Friday’s Mexican retail sales and semi-annual inflation data.
- Risk catalysts like virus updates, business news provide background music.
The USD / MXN is extending recovery movements from a two-month low of 23.05 while taking offers near 23.22 amid initial Tokyo trading on Thursday. While the general weakness of the US dollar and the feeling of risk drove the listing to several days low the previous day, the latest news on oil and risk seems to have offered the latest rebound.
Among them, the pause in the market’s feelings of risk, as well as the cessation of oil around its two-month high at $ 33.78, acquire the front lines.
The number of virus cases in the world exceeding 5 million brands, associated with the increase in cases in South America, the optimism of Wednesday seems to fade late. Probing the optimists could also heighten the US-China tension, according to the White House statement quoted by the Washington Post.
In addition, the news of the reopening of Mexico City on June 01 despite a generalized viral epidemic also weighs on the tone of the risk, while the extension by the United States of the ban on non-essential trips to Mexico and Canada adds to the weakness of the Mexican currency.
Amidst all of these catalysts, the S&P 500 Futures posted a loss of 0.30% to slide below 2,960 while 10-year US Treasury yields hovered around 0.6770% at the time of the press.
Continuing, preliminary readings of activity figures for the month of May in the United States will be key for traders of the pair to watch before the Mexican data on Friday. However, qualitative factors seem to retain the driver’s seat for the time being.
The pair’s sustained trading below the 50-day EMA level of 23.35 keeps sellers optimistic about breaking the round numbers of 23.00 to aim for the March 27 low of 22.86. On the upside, a weeklong trend line, currently around 23.63, adds to the pair’s resistance beyond the 50-day EMA.