USD/MXN jumps to test 24.50 as risk aversion hits Mexican peso

• Mexican peso under pressure as Wall Street tumbles.
• USD/MXN heads for the est close in two weeks.

The Mexican peso is falling against the US dollar and is among the worst performers on Tuesday amid risk aversion. The USD/MXN rose from 24.05 to 24.49, reaching the highest level since April 8.

As of writing, USD/MXN is hovering around daily highs with the bullish tone intact. The key driver in price action on Tuesday is the deterioration in market sentiment. In Wall Street, the Dow Jones is falling 2.50% and the Nasdaq 3.40%. Crude oil prices are also under pressure. The WTI barrel opened the day above $21.00 and is testing the $13.00 level.

The risk aversion environment favours the demand for the greenback against commodity and emerging market currencies. The Russian ruble and the Colombian peso are the worst performers followed by the Mexican peso. USD/COP is up 1.90% and the USD/RUB 2.25%.

Technical outlook

The USD/MXN gains 1.70%, and it heads for the highest close since early April. The bullish bias will likely remain intact while above 23.80, a short-term uptrend line. North of 24.50, the next resistance is seen at 24.65/70 followed by 25.00.