USD/MXN heads for lowest close since August 2018

• Mexican peso rises again versus US dollar on global risk appetite. 
• USD/MXN break January lows, vulnerable to more losses. 

The USD/MXN pair is falling on Wednesday for the third day in a row and it broke below January lows to 18.56, hitting the lowest intraday level since October 2019. The Mexican peso remains supported by the improvement in risk sentiment. In Wall Street, the Dow Jones is up 1.36% and the Nasdaq gains 0.24%. 

US economic data came in better-than-expected on Wednesday and offered support to the greenback against majors but not versus commodity and emerging market currencies. In a few hours, the US Senate will vote on Trump’s impeachment. 

The DXY is up 0.27%, trading at 98.25, the highest level since early December. Also US yields are higher. The worst performers are safe-haven assets like the yen and the Swiss franc. 

Levels to watch 

The USD/MXN is trading around 18.60, about to post the lowest close since August 2018. A consolidation below 18.65, leaves the door open to more losses. Support levels are seen at 18.55, 18.49 (October 2018 low) and 18.40. 

The break below 18.65 reaffirms the bear trend. Immediately the greenback needs to rise back above 18.65 to remove the short-term bearish pressure; above the next resistance comes at 18.75. While below 19.00, the pair seems vulnerable to the downside.