USD/MXN drops to 1-year lows under 17.90

Emerging market currencies are up against the US dollar on Monday. Among them, is the Mexican peso that reached the highest level since May 2016 again the US dollar. USD/MXN dropped below the key 17.90 support and bottomed at 17.81. 

From the lows, the pair bounced and it was still trading under 17.90, headed toward the lowest close in more than a year. An improvement in risk appetite, the mild recovery in crude oil prices and last week rate hike from Banxico, are offering support to the peso. 

The trend continues to point to the downside as it has been the case since January. From 2017 highs, the pair lost almost 20%. 

Levels to watch

USD/MXN remains under the 17.90/18.00 zone, that now has become a resistance area. Above that level, the US dollar could gain support and remove some short-term bearish pressure. The next resistance is seen at 18.15, followed by 18.30 (Jun 21 high). On the downside, the immediate support is now seen at 17.80/82 (daily low), 17.70 and 17.45 (Dec 2015 high).