The USD/MXN currency pair has been on a downward trend for the past few months, dropping to six-year lows as sellers target 17.50. This has been driven by a combination of factors, including the strength of the Mexican economy, political uncertainty in the United States, and the impact of the COVID-19 pandemic.
The Mexican economy has been performing well in recent years, with strong growth and low inflation. This has led to increased confidence in the Mexican peso, which has appreciated against the US dollar. In addition, Mexico has been able to weather the impact of the COVID-19 pandemic better than many other countries, thanks to its diversified economy and strong public health response.
At the same time, political uncertainty in the United States has also contributed to the weakness of the US dollar. The ongoing trade tensions between the US and China, as well as the upcoming presidential election, have created a sense of uncertainty among investors. This has led many to seek out alternative currencies, such as the Mexican peso.
Looking at the technical analysis of the USD/MXN currency pair, we can see that it has been in a clear downtrend for several months. The pair has broken through several key support levels, including the 18.00 and 17.75 levels. This suggests that there is significant selling pressure on the pair, with traders looking to take advantage of the weakness in the US dollar.
In terms of potential targets for sellers, the 17.50 level is a key psychological level that could act as a major support level. If this level is broken, we could see further downside momentum in the pair, potentially pushing it towards the 17.00 level.
However, it is important to note that there are also risks to this outlook. The ongoing COVID-19 pandemic could lead to further volatility in financial markets, while political developments in both Mexico and the United States could also impact the currency pair. As always, traders should be aware of these risks and adjust their trading strategies accordingly.
In conclusion, the USD/MXN currency pair has dropped to six-year lows as sellers target 17.50. This has been driven by a combination of factors, including the strength of the Mexican economy, political uncertainty in the United States, and the impact of the COVID-19 pandemic. While there are risks to this outlook, traders should be aware of the potential for further downside momentum in the pair.
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- Source: https://zephyrnet.com/usd-mxn-price-analysis-plummets-to-six-year-lows-with-sellers-eyeing-17-50/
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