USD/MXN consolidates losses after hitting two-month lows near 22.00

• The Mexican peso trims gains versus US dollar, heads for the highest close since March 13.
• Weaker US dollar drops across the board, DXY falls to three-week lows.

The USD/MXN is falling for the seventh consecutive day on the back of an improvement in market sentiment and a weaker US dollar. Stock worldwide rose on Tuesday amid optimism over the reopening of the economy.

In Wall Street, the Dow Jones gains 2.65% and the S&P 500 1.80%. At the same time, the US dollar is falling sharply across the board, particularly versus commodity currencies. The DXY is declining by almost 1% and it is trading below 99.00, at the lowest in three weeks.

The Mexican peso rose to fresh two-month highs against the US dollar on Tuesday. The USD/MXN bottomed at 22.10 and then rebounded modestly to 22.35. As of writing, it trades at 22.20, down 1.40% for the day, about to post the lowest close since March 13.

Technical outlook

The bias continues to point to the downside in USD/MXN. The RSI in the daily chart is about to reach extreme oversold levels but is still moving south. No signs of a bullish correction are seen at the moment.

The immediate support area is seen at 22.00/05 followed by 21.60. On the upside, 22.50 is the first resistance level and then 22.75/80 (weekly high) and 23.20.