USD/MXN set to rebound from the 20.00 level – Credit Suisse

Economists at Credit Suisse look for USD/MXN downside to be limited to 20.00 and would look to fade rallies back to 20.77.

USD/MXN downside to be limited to 20.00

“We are moderately constructive over the medium-term on MXN, as we see potential for US demand spillover into Mexico to translate in better local economic data, with positive implications for the currency.” 

“Dips in USD/MXN below 20.00 are likely to be limited, and that a correction higher in the pair is likely needed, ideally back towards the 200-DMA at 20.77, for USD/MXN downside to offer good risk-reward to those looking to go long MXN as an expression of US demand spillover and/or of positive BOP externalities.”