USD/MXN drops to 2-month lows as USA votes

The Mexican peso surged on Tuesday extending the rally that started back on Thursday. The expectations about a triumph of Hillary Clinton in today’s election continued to give support to the peso. 

USD/MXN opened yesterday with a significant bearish gap, then stabilized above 18.55 and recently broke below that level, accelerating to the downside. The  pair bottomed recently at 18.38, the lowest since September 8. 

Currently, it trades at 18.47, down 0.45% for the day and more than 4% under the level it has a week ago. 

The sharp decline could have discounted a Clinton victory, so in the case of any surprises in the votes in favor of Donald Trump, the Mexican peso could reverse sharply. 

Technical levels 

To the upside, resistance levels might be seen at 18.53/55 (Nov 7 low), 18.72 (Nov 7 high) and 19.10 (Oct 10).  On the flip side, immediate support could be located at 18.38 (Nov 8 low), 18.25 (Sep low) and 18.00 (psychological). 

To learn more about this topic, check our video analysis.