USD/MXN tumbles to five-day lows as Mexican peso strengthens

• The Mexican peso and the Brazilian real are the top performers on Tuesday.
• USD/MXN testing the 24.30 area, below a visit to 24.00 seems likely.

The USD/MXN is falling on Tuesday by more than 1% on the back of an improvement in risk sentiment. The pair dropped from 24.85 to 24.31, reaching the lowest level since last Thursday.

After the beginning of the American session, USD/MXN rebounded. It found resistance at 24.50, and as of writing, it is moving closer to the 24.30 area.

A weaker US dollar and the recovery of the Mexican peso are the key drivers in the decline of USD/MXN. The Mexican peso and the Brazilian real are the top performers among the most traded currencies across the globe. Both currencies held on to gains despite the fact that Wall Street indexes turned negative.

Regarding economic data, in the US, the Consumer Confidence index tumbled to 86.9 in April. On the positive, the future expectations component recovered. “Even amidst this lockdown and the joblessness that comes with it, expectations actually rose. In fact, at 93.8 in April, expectations are not far off from 94.5 where it was in October”, explained analysts at Wells Fargo.

Technical levels