USD/MXN drops gain but holds above 19.00

• Mexican peso gains versus US Dollar for the third-day in-a-row. 
• DXY rises, but greenback falls versus EM currencies amid lower yields and risk appetite. 

The USD/MXN pair dropped on Wednesday and reached the lowest level since June 21st at 19.00. From the lows bounced to the upside finding resistance at 19.07 and turned again to the downside. Near the end of the day, was trading at 19.02, down almost 1% from Friday’s close. 

The improvement in risk sentiment and lower US yields continue to keep the bearish pressure intact. But USD/MXN so far has been able to hold on top of the psychological level of 19.00. A consolidation below would expose the next support at 18.90. 

Treasuries rose on Wednesday; the 10-year yield ended at 1.95%, the lowest close since November 2016. While in Wall Street, the DOW JONES ended at record high levels up 0.67%. US markets closed earlier and will not open on Thursday. On Friday, the NFP report is due. US data on Thursday came in mixed, and it was mostly ignored by market participants on a low volume session. 

From a technical perspective, the USD/MXN holds a bearish bias in the short-term, but a breakout below 19.00 is needed to clear the way to more losses. On the upside, above 19.10, the bearish momentum will likely ease. The critical resistance could be seen around the 19.25 area, a horizontal level, and the 20-day moving average.