Presidential debate concludes, Mexican Peso resumes rally

Mexican Peso is extending two-day winning streak after Trump’s answer to whether he shall accept election results received widespread criticism.

At the time of writing, USD/MXN pair was trading around 18.46 levels and was on track to test the rising trend line coming from Apr 29 low and Aug 16 low. The trend line support is seen around 18.4175 levels.

Mexican Peso is widely called as ‘Trump Thermometer’, given the currency is highly sensitive to Trump’s Anti Mexico rhetoric. The rise in the currency suggests markets believe Trump lost the debate.

When quipped about whether he shall accept election results, Trump relied that ‘he shall look at it at the time’. This has been read by many as a sign that Trump could challenge the results if he loses elections.

USD/MXN Technical Levels

A break below 200-DMA level of 18.38 could yield a further sell-off to 18.2578 (Sep 6 low). On the higher side, breach of immediate resistance at 18.6896 (previous day’s high) would open doors for 18.909 (50-DMA).