USD/MXN jumps toward 20.50 as the Mexican peso tumbles

• Mexican peso extends losses across the board during the American session.
• On Friday, USD/MXN gains more than 1.25%, heads for the second-highest weekly close since March.

After a brief pullback, USD/MXN resumed the upside and climbed to 20.44, the highest level in eight weeks, boosted by a decline of the Mexican peso across the board.

The risk-aversion environment across global market continues to weigh on emerging market and commodity currencies; among them, the Mexican peso suffered the most on Friday, driven by technical factors.

The USD/MXN broke above the 20.20/25 strong resistance area and jumped to 20.40. It rose further on American hours and it is holding near the daily high, with the bullish tone intact. The dollar is gaining 1.30% against the Mexican peso and it heads for the highest weekly close since June.

On Thursday, USD/MXN rose above the 200-day moving average and also closed above the 20.15 key area. More gains should find resistance around 20.55. On the weekly chart, the cross is about to test the 55-week moving average, that capped the upside during 2021.

USD/MXN daily chart