USD/MXN rebounds sharply and approaches 19.00

• Mexican peso among worst performers on Monday, on a quiet session. 
• USD/MXN rebounds from 18.80, still holds a bearish bias. 

The USD/MXN rose sharply on Monday, erasing Friday’s losses and climbed back above 18.90. The pair posted its best performance in a month and recovered after falling to multi-month lows. 

Supported by 18.80

Earlier today, USD/MXN bottomed at 18.79, the lowest intraday since May and then it reversed sharply. It started to rise and accelerated to the upside on American hours. It is trading at 18.94, near Friday’s high. 

The sharp reversal could signal the Mexican peso’s rally is temporally over. Still the trend and the short term bias in USD/MXN points to the downside but a consolidation above 19.00 would point to some recovery or stabilization ahead. If the downside resumes, below 18.80 attention would turn to the 2019 low at 18.74. 

The bounce from the 18.80 zone, took place amid a modest decline of the Mexican peso across the board. The currency was among the worst performers and versus the greenback suffered the biggest daily loss in a month. On the contrary, the Brazilian real outperformed and rose almost 1% versus the US dollar on Monday. 

Price action is likely to remain limited over the next hours ahead of new year celebrations. In Wall Street, the bond market will have an early close on Tuesday. Normal activity will return on Thursday and volume is expected to recover regular levels next week. 

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