USD/MXN to 20?

USD/MXN to 20?

USD/MXN to 20?

We don’t usually talk about the Mexican Peso but it is the currency affected the most by the change in election polls and one that we will seriously consider live trading on Tuesday. The following chart shows the strong positive correlation between the U.S. dollar / Mexican Peso currency pair (yellow line) and Real Clear Politics’ 2016 Presidential Poll Average Value for Donald Trump (white line). When Trump’s popularity rises, USD/MXN soars so if the polls remain tight and Trump wins USD/MXN could break 20 easily. From building a wall to scrapping NAFTA, Trump’s policy almost seemed aimed at killing Mexico’s economy. This past week when there was a report that Trump was leading in the polls, USD/MXN jumped 1.75%. On that same day, the dollar index dropped less than 1%. USD/MXN will certainly have the biggest reaction to a Trump victory or defeat.

On a technical basis, the 50-day SMA near 19.00 is support although a clean Clinton victory could take the pair as low as the 200-day SMA near 18.40. A Trump victory on the other hand would send USD/MXN to new record highs above 20.

Chart Of The Day

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