USD/MXN rises to 19.20, 1-week high

The Mexican peso is falling against the US dollar on Monday. USD/MXN climbed toward 19.20 hitting the highest level since April 27. It was trading at 19.15, up 0.80% for the day. 

During the last five days, the pair has risen more than 2%, amid a stronger US dollar and a slide of the Mexican currency across the board, affected in part by the slide in crude oil price. 

Testing key level 

The pair peaked at 19.19 and pulled back modestly. The area around 19.20 is an important short-term resistance. A consolidation on top could open the doors to further gains. The next resistance is seen around 19.40/45. 

On the downside, if the pair drops back below 19.10, the Mexican peso could gain some momentum. The next support is located at 18.90. 

The current bias favors a consolidation with an upside bias. The pair is finally rebounding, following the decline from record highs above 22.00 (Jan) to 18.45 (Apr 18). 

Data ahead 

Tomorrow, in Mexico the Consumer Price Index for April will be released. Inflation is expected to climb to 5.75%, the highest since May 2009. Next week, will be Bank of Mexico meeting. “While further tightening would seem warranted, we think Banxico will remain on hold at its May 18 meeting.  If the Fed hikes in June and price pressures are still rising, then a hike at its June 22 meeting seems likely”, said analysts from Brown Brothers Harriman.