USD/MXN: Mexican peso accelerates slide to fresh eight-month lows, above 21.20

• The Mexican peso among the worst performers on Tuesday.
• Caution across financial markets and the Turkish lira crisis weighs on sentiment.
• USD/MXN about to post the third-highest daily close in one year.

The USD/MXN is rising for the fourth consecutive day and it accelerated during the American session, climbing to 21.31, the highest intraday level since March 9. As of writing, it is hovering around 21.20, up more than 1% for the day.

The rally was triggered by a strong US dollar across the board and a cautious tone across financial market. The sharp devaluation of the Turkish lira also hit market sentiment and favored more gains in USD/MXN.

The USD/TRY was up almost 20% at one point of the session, at 13.50, before pulling back. It is trading at 12.75, up 12%. At the same time, the greenback remained strong supported by higher US yields. The rally that started on Monday after President Biden announced he will renominated Federal Reserve Chair Powell continued on Tuesday.

The biggest losers of the day are the Turkish lira followed by the Mexican peso. Also, commodity currencies remain pressured by the slide in gold and silver.

The USD/MXN is about to post the third-highest daily close since October 2020. If it remains above 21.15, the odds of more gains will remain intact. The next resistance might be seen at 21.45/50.

Technical levels