USD/MXN  jumps above 21.00 as Wall Street tumbles

• Mexican peso drops across the board on risk aversion, among worst performers. 
• USD/MXN gaining upside momentum; above 21.30, could go for 21.80. 

The slide of USD/MXN was short-lived and it resumed the upside. On Tuesday the pair bottomed at 20.28 but then, it started to rise. After posting a close at 20.80, it remained relatively quiet until the beginning of the American session when it jumped above 21.00. 

Recently it printed a fresh two-day high at 21.27. As of writing, trades at 21.20, up almost 2% for the day. Among the most traded emerging market currencies, the Mexican peso is the worst performer on Wednesday. 

Risk aversion weighs on MXN

Wall Street is falling sharply, erasing yesterday’s recovery. The Dow Jones drops 4.05% and the Nasdaq 3.67%. Crude oil prices are also pulling back after a rebound. The WTI barrel stands at $33.40, down 2.75%. Fear continues to be the key driver across financial markets. 

Among currencies, the US dollar strengthened over the last hours, erasing daily losses versus its G10 rivals, and hitting fresh highs against emerging market currencies. 

Levels to watch 

A break above 21.30/35 would reinforce the bullish outlook in USD/MXN. The next resistance stands at 21.80 that protects 22.00. A rise above the 22.00 psychological zone, could trigger measures from the Bank of Mexico. 

On the flip side, a slide below 20.80 would ease the bullish pressure and below, support levels lie at 20.50 and 20.30.