USD/MXN Price Analysis: Mexican peso buyers cheer WTI gains
- USD/MXN drops for the third day in the last four.
- WTI June Futures surge to a two-month high on demand hopes.
- Coronavirus continues to spread in Mexico, President Andrés Manuel López Obrador said the country must adapt to the "new normal".
- No major data keeps the pair of traders directed towards oil prices moves, qualitative catalysts.
USD/MXN declines to the intraday low of 23.90 during the early Asian session on Monday. While the US dollar registers broad gains against the majority of its counterparts, mainly due to the Fed Chair Powell’s latest comments, the pair seems to follow oil price moves for the latest fall.
Read: WTI pierces $30, rallying on demand hopes
WTI June Futures on NYMEX rises the highest since mid-March after the weekend comments from the US Federal Reserve Chairman Jerome Powell propelled demand hopes. The energy benchmark earlier benefited from the downbeat US dollar and further weakening of inventories, not to forget output cuts from the key producers.
Fed Chair Powell recently struck an upbeat tone for the nation’s recovery while also pouring cold water on the face of those expecting negative Fed rates. Even so, the Fed leader cited the central bank’s ammunition power if required to use.
On the other hand, the coronavirus (COVID-19) is spreading faster in Mexico. The latest update from the health authorities, as cited by Reuters, said,” Mexico registered 49,219 cases of coronavirus on Sunday, with the country’s death toll rising to 5,177.”
Amid all these catalysts, the market’s risk-tone remains positive with US 10-year Treasury yields and Asian stocks flashing mild gains by the press time.
Looking forward, a lack of major data/events will keep the pair traders directed towards oil prices moves and the trade/virus updates for fresh direction.
Technical analysis
An ascending trend line from late-March, at 23.60, seems to offer strong support during the pair’s gradual downside. On the contrary, a three-week-old falling trend line, currently around 24.20, restrict the pair’s immediate upside.