USD/MXN retreats after hitting three-week highs near 19.25

• Mexican peso recovers ground against the US dollar even as most emerging market currencies hold to losses.
• USD/MXN finds resistance around 19.25 and pulls back. 

The USD/MXN rose to 19.24, reaching the highest level since October 16 and then pulled back. As of writing trades at 19.18, near yesterday’s close. 

The Mexican peso recovered after USD/MXN approached the key resistance area of 19.25. The move to the upside was boosted by a stronger US dollar against emerging-market (EM) currencies. Later, some technical factors contributed to the correction in USD/MXN, even as the Greenback remained near daily highs versus EM. 

Tomorrow in Mexico inflation data is due and next week will be the Bank of Mexico board meeting. In the US, with no relevant economic reports ahead, attention is set on speeches from Federal Reserve officials and on US/China trade talks that should continue to impact on market sentiment. 

Levels to watch

The pair is moving sideways with now an intarday bias to the downside but still with some bullish signs exits. It needs to break above 19.25 to clear the way to more gains targeting initially 19.30. Above the next critical levels is located around 19.45/50. 

On the flip side, the immediate support might be located at 19.15 followed by 19.05. The crucial area to watch for the bears is 19.00: a daily close below could trigger more losses toward the year-to-date low at 18.74.